Analysis of the Moroccan Payment Landscape: A Transition at the Heart of a Fragmented Ecosystem
this article paints a compelling picture of a Moroccan payment ecosystem in a state of important tension. Here’s a breakdown of the key takeaways and a more structured analysis:
1. The Core dichotomy: Cash vs. Digital Payments
Cash Dominance: Despite growth in digital payments, cash remains king in Morocco. Fiduciary currency circulation is increasing (7% annual growth, 80% over 5.5 years) – a stark contrast to global trends. This isn’t a temporary blip; its a “heavy trend” rooted in structural issues.
Digital growth: Dematerialized payments (transfers and cards) are growing rapidly. Overall volume doubled between 2019-2024, and value increased by over 50%. Though, this growth isn’t enough to displace cash. The Disconnect: This divergence highlights basic economic and social fractures within Morocco.
2. Drivers of Cash Dominance:
Unstructured Sector: A large informal economy operates outside formal financial systems, relying heavily on cash. Financial Exclusion: Significant portions of the population lack access to formal banking and digital payment solutions.
Socio-Cultural Factors: Cultural preferences and habits contribute to a preference for holding cash.
Temporary Banking Effects: A recent tax amnesty temporarily reduced cash circulation, but this was a short-term effect.
3. The Rise of digital Payment Instruments:
Bank Transfers: The primary driver of digital growth, notably for high-value transactions (49% of volume, 61% of value). Instant transfers are gaining traction (3% of volume) and formalizing business-to-business payments and wages. Significant growth of 41% in a single year.
Bank Cards: Dominant in retail payments (33% of volume), reflecting the digitalization of consumer spending.A large card base (22.6 million units) demonstrates widespread adoption.
Checks: In decline (13% volume decrease in 5 years), relegated to specific, high-value transactions. A high rejection rate (3.23%) is eroding confidence and accelerating its decline.
4. Morocco vs. Global Trends:
Counter-Trend: Morocco is bucking the global trend of rapid dematerialization of payments, as evidenced by reports from McKinsey, the ECB, and Worldpay. Globally, digital wallets and cards are gaining dominance, while cash is declining.
5. Key Implications & Potential Issues:
Economic Fragmentation: the reliance on cash suggests a fragmented economy with a significant portion operating outside the formal system. This hinders transparency, tax collection, and economic development. Financial Inclusion Gap: The continued dominance of cash underscores the need to address financial inclusion challenges.
Inefficiency & Risk: Cash-based transactions are less efficient, more prone to loss and theft, and can facilitate illicit activities.
* Modernization Challenges: The persistence of cash presents a challenge to modernizing the Moroccan economy and integrating it more fully into the global financial system.
the article highlights a complex and evolving payment landscape in Morocco. while digital payments are growing, they are struggling to overcome deeply entrenched structural factors that favor cash. Addressing these factors will be crucial for fostering a more inclusive, efficient, and transparent economy.
