FinTechs Reshape Middle East Money Movement as Capital Returns

The region combines high smartphone penetration, young demographics and state-backed modernization of payment rails. Governments across the Gulf have treated digital channels and faster money movement as economic infrastructure. As a result, payments, lending and treasury functions are increasingly built directly into platforms and cross-border fund flows.

That environment has proved conducive to embedded finance. Consumers and small businesses are comfortable transacting through mobile wallets and super apps, while banks and regulators have shown a willingness to support controlled experimentation.

Capital Flows and Confidence

After a global pullback in FinTech funding in 2023 and early 2024, capital has begun flowing back into the Middle East. McKinsey’s May 2025 assessment of the region’s FinTech sector notes a rebound in investment, with funding increasingly directed toward firms that support payments, lending and financial infrastructure. “Going forward, we expect MENA to be the fastest-growing region globally, with 35% annual growth in fintech net revenue until 2028, compared with a global average of 15%,” McKinsey noted. Last month, Wamda Research noted that investment across MENA (Middle East and North Africa) were up by 77% to $7.5 billion in the aggregate; FinTechs garnered 58% of that share.

Stablecoin settlement, embedded issuing and cross-border wallets align closely with that shift, because they generate revenue through usage rather than scale alone.

Regulation Is an Accelerant

A defining feature of the Middle East’s FinTech expansion is the role of regulatory sandboxes, where there are 11 such sandboxes that enable forms to test new payment products under supervisory oversight. These programs give regulators visibility into emerging risks while offering FinTechs a clear pathway to licensing.

The appeal of sandboxes lies in predictability. Firms can pilot products such as real-time settlement, digital wallets or stablecoin-based payments with defined parameters.

Saudi Arabia illustrates how consumer behavior and infrastructure investment reinforce each other. PYMNTS Intelligence research shows that Saudi consumers are among the world’s most enthusiastic users of digitally assisted commerce, with more than half preferring Click-and-Mortar shopping that blends online tools with physical retail. Merchants in the kingdom offer more digital shopping features than peers in other major markets, creating fertile ground for embedded payments and credit at the point of interaction.

Money movement data gleaned by PYMNTS Intelligence and Terrapay underscores the opportunity. Fourteen percent of Saudi consumers made a cross-border payment, and digital wallets are the most recognized method for those transactions. Among small businesses with annual revenues under $500,000, half already use digital wallets for cross-border payments, reflecting practical demand rather than speculative interest.

These behaviors support embedded finance models that integrate payments, FX and short-term credit directly into merchant platforms.

Stablecoins and Cross-Border Rails

The Middle East has also become an early proving ground for stablecoin-based settlement. This month, payments infrastructure provider NymCard went live with Visa to enable USDC stablecoin settlement for card transactions in the GCC, allowing 24/7 settlement and reduced prefunding requirements. Visa executives have framed stablecoins primarily as tools for cross-border payments and disbursements rather than everyday consumer spending, a positioning that aligns with regional demand. That framing matters because it places stablecoins squarely within existing payment ecosystems.

The Middle East’s FinTech ascent is not without friction. Larger enterprises remain cautious about digital wallets for cross-border payments, citing security and tracking concerns, as our data show. Regulators continue to balance innovation with financial stability. Yet the direction of travel is clear. Capital is flowing toward platforms that embed money movement into commerce and  regulation is evolving to support controlled experimentation.