The move from cash to digital payments was well underway in Oman before the outbreak of the pandemic, but it remarkably accelerated digitalisation of payments in the sultanate in the last two years.
A report released by the Central Bank of Oman on Sunday showed how digital payments have thrived in the COVID-19 era in the sultanate. The volume of e-payment transactions in the sultanate surged by 40.6 per cent in 2021 and 19.2 per cent in 2020.
“The main driver for this growth was the wider spread of e-commerce and further movement away from cash and rising use of mobile phones. This shift was further fuelled by the lockdown periods that came as a measure to prevent the spread of the pandemic,” CBO said in its Financial Stability Report 2022.
It said the volume of transactions via e-commerce and point of sale (POS) grew at a ‘historical rate’ of 78.7 per cent and 47.9 per cent in 2021 and 2020, respectively.
The growing adoption of digital payments has contributed to moderation in the use of cash. This is clearly reflected in the share of e-payment transactions by volume, where the share of POS increased by three per cent at the expense of ATM transactions as people were encouraged to avoid unnecessary cash usage, the central bank noted.
Card payment transactions, the CBO reported, continue to dominate overall transactions supported by high consumer awareness and government initiatives to promote electronic payments.
In order to further encourage the use of online payment methods, the Ministry of Commerce, Industry and Investment Promotion had issued a decision on providing electronic payment services for consumers. Places that sell food items, restaurants and cafes are some of the facilities that are covered under this decision. The move seeks to achieve digital transformation through cooperation between all related parties.
Due to the rise of electronic alternative payments, there has been a remarkable decline in the use of cheques for payments in Oman in the last two years.
Transactions in cheques fell from 4.7mn cheques in the pre-pandemic year of 2019 to 4mn in 2020 and 3.8mn in 2021, the CBO data showed.