Cashless revolution gathers pace

MUSCAT, NOV 9
Oman's transition towards a cashless economy is gathering significant momentum, with digital payment channels increasingly displacing traditional cash withdrawals and cheque-based transactions, according to the Central Bank of Oman's (CBO) newly released Financial Stability Report 2026.
The report paints a picture of a rapidly evolving payments landscape in which mobile transfers, card-based transactions, e-commerce and instant payment solutions are becoming increasingly central to everyday economic activity. Underpinning this transformation are regulatory reforms, modernised payment infrastructure and the growing adoption of internationally standardised account identifiers.
Perhaps the strongest indication of this structural shift is the 52.6 per cent increase in aggregate payment transaction volumes during 2025, compared with a more modest 13.6 per cent rise in transaction value. This divergence suggests that Omanis and businesses are increasingly using electronic channels for smaller, more frequent payments, rather than relying predominantly on cash or conventional banking instruments.
The CBO attributes this transformation to a combination of technological innovation, improvements in payment accessibility and sustained efforts to build a more efficient, inclusive and resilient financial system.
MOBILE PAYMENTS LEAD TRANSFORMATION
Among the most striking developments was the near-doubling of transactions processed through the Mobile Payments Clearing and Switching System (MPCSS).
Transaction volumes through this platform surged 99.4 per cent in 2025, while their aggregate value climbed 87.9 per cent, making mobile payments the fastest-growing segment of Oman's retail electronic payments ecosystem.
The figures point to the increasing popularity of instant transfers and mobile-enabled payment solutions, supported by the proliferation of digital banking applications and other electronic payment services.
Overall, retail electronic payment volumes expanded 52.7 per cent during the year, while their combined value increased 23.7 per cent.
OmanNet, the national electronic payment network supporting card-based transactions, also recorded robust growth. Transaction volumes increased 37.9 per cent, accompanied by a 14.4 per cent rise in value, reflecting the growing preference for electronic payments among consumers and businesses.
The Automated Clearing House (ACH), which facilitates bulk transactions including salary payments and government transfers, maintained steady growth, with transaction volumes rising 9.7 per cent and values increasing 12.5 per cent.
Together, these developments underline the widening reach of electronic payment systems across retail, corporate and government-related financial transactions.
CARD PAYMENTS SURGE
The changing payment preferences of consumers are particularly evident in the contrasting performance of automated teller machines (ATMs) and point-of-sale (POS) terminals.
ATM transaction volumes declined 14.5 per cent during 2025, with the value of withdrawals reaching RO 2.66 billion. This contraction points to reduced dependence on physical cash for routine transactions.
By contrast, POS transactions surged 47.4 per cent, with their aggregate value reaching RO 4.23 billion, reflecting growing acceptance of card-based and contactless payments across commercial establishments.
E-commerce also maintained its upward trajectory, recording transaction growth of 20.4 per cent and reaching a value of RO 1.82 billion.
Taken together, ATM, POS and e-commerce transactions increased 39.4 per cent in volume, with their combined value reaching RO 8.72 billion.
The figures suggest that digital payments are becoming increasingly embedded in Oman's retail economy, extending beyond conventional banking transactions into shopping, services and online commerce.
They also highlight the growing importance of payment infrastructure capable of handling large volumes of relatively small transactions efficiently and securely.
E-COMMERCE STRENGTHENS DIGITAL ECOSYSTEM
The expansion of e-commerce is another important dimension of Oman's changing payments landscape.
The RO 1.82 billion value of online transactions in 2025 underscores the increasing role of digital commerce in consumer spending and business activity.
This trend is significant for retailers, service providers and small businesses, for whom electronic payment acceptance can facilitate wider customer reach, more convenient transactions and improved payment reconciliation.
Importantly, the rise of online commerce is occurring alongside a broader shift towards digital payment acceptance at physical retail outlets.
The simultaneous expansion of POS and e-commerce transactions suggests that electronic payments are gaining ground across both conventional and online commercial environments, rather than being confined to a single segment of the economy.
MODERN ACCOUNT IDENTIFIERS GAIN PROMINENCE
Beyond consumer-facing payment channels, the CBO report highlights significant progress in modernising the underlying infrastructure used for domestic and international bank transfers.
The International Bank Account Number (IBAN) has emerged as a particularly important instrument for cross-border transactions. During 2025, international payments received using IBAN accounted for 53 per cent of transaction volumes but approximately 75 per cent of their total value.
In monetary terms, IBAN-based international receipts amounted to around RO 142.8 billion, compared with RO 47.9 billion for payments received without IBAN. The substantial difference indicates that standardised account identifiers are particularly important for higher-value corporate, institutional and trade-related international transfers.
The CBO notes that IBAN adoption helps improve payment accuracy, reduce reconciliation errors and strengthen the operational resilience of the banking system.
Domestically, however, adoption remains at an early stage following the extension of IBAN to local transfers in mid-2025. IBAN-based domestic payments accounted for just 4 per cent of transaction volumes and 1 per cent of their total value, indicating that traditional account identifiers continue to dominate local transfers.
Nevertheless, the introduction of IBAN for domestic payments establishes a foundation for greater automation, improved processing efficiency and reduced operational errors as adoption increases.
PAYMENT REFORMS SUPPORT DIGITAL ADOPTION
The transformation of Oman's payments ecosystem is being reinforced by several regulatory and infrastructure initiatives.
A major milestone during 2025 was the launch of Maal, the Sultanate of Oman's domestic card payment scheme, intended to strengthen national payment sovereignty, enhance data security and reduce transaction costs.
The CBO also expanded Omani banks' participation in Afaq, the GCC Real-Time Gross Settlement system, providing a more efficient and cost-effective channel for cross-border transfers within the Gulf region.
Meanwhile, revisions to payment system fees, including transaction fee caps and exemptions for certain digital transactions, have helped make electronic payments more affordable.
Enhancements to the direct debit system, coupled with the introduction of electronic authorisation, have also simplified recurring payments by reducing paperwork and enabling digital approvals.
These reforms are intended to encourage wider participation in electronic payments while strengthening the reliability and efficiency of the national financial infrastructure.
Taken together, these developments illustrate a payment ecosystem undergoing transformation at multiple levels: consumers increasingly favouring mobile and card-based transactions, businesses embracing electronic commerce, and financial institutions adopting more sophisticated settlement infrastructure.
With electronic channels now accounting for the majority of transactions, Oman's movement towards a less cash-dependent economy appears firmly established, supported by continued investment in financial infrastructure and regulatory modernisation aligned with Oman Vision 2040.