Determinants of Digital Payment Intensity in the MENA Region: A Panel Data Analysis

Abstract

The rise of digital payments, particularly during the 2020 lockdown, underscores the growing significance of fintech, valued at over USD 127 billion globally. However, studies on factors influencing digital payment utilization remain limited. This study analyzes determinants of digital payment intensity in the MENA region, using data from 13 countries (2011-2021) sourced from the World Bank. Panel data analysis revealed that the percentage of accounts and deposits in financial institutions positively impacts digital payments, while household savings negatively influence them. Conversely, digital payments received are positively affected by accounts, deposits, retirement savings, and borrowing levels, but negatively influenced by household savings and entrepreneurial savings. The study concluded that the factors affecting digital payments received are both cross-sectional and time-fixed, while those affecting payments made are random.