As e-payments surge, ATM usage slows down in Oman

Muscat: Online retail transactions (direct credit & direct debit) exponentially increased in the Sultanate by 37.8 percent in 2022 from the previous year reaching 274.4 million from 199.2 million transactions.

Additionally, the value of transactions executed via retail systems increased by 13.1 percent from the previous year reaching a total value of RO 27.3 billion, said CBO in its Financial Stability Report 2023.

The main driver for this growth has been the rising use of e-payment services.

Digital payment initiatives emerged as a cornerstone during the pandemic to make safer and quicker payments for goods and services.

The advancement in terms of reach and utilization of progressive payment systems has been emboldening, highlighting the exponential increase in the volume of transactions processed through the retail payment systems during the years 2021 and 2022.

For example, ACH usage has grown by 25 percent in both volume and value terms. An ACH bank transfer is an electronic payment made between banks for payment purposes. The network that these payments occur across is known as an "automated clearing house."

ACH bank transfers are used for many purposes, such as direct deposits of paychecks, debts for regular payments, and money transfers.

Additionally, OmanNet usage increased by nearly 40 percent in transactions and about 13 percent in value terms primarily led by the increase in E-commerce transactions.

Similarly, the cheque payments volume has been decreasing- falling below the 5-year average- indicating the move from paper-based to digital alternatives.

Whereas, mobile payment usage showed a significant increase of 551 percent in transactions and 385 percent in value (Graph 2.2.4). Accordingly, the volume of E-Payment transactions increased by 39.4 percent in 2022 to 252.9 million transactions compared to 180.8 million transactions in 2021, primarily driven by POS transactions (50.2 percent), followed by transactions via e-commerce (35.5 percent). In comparative terms, the growth of ATM transaction volume was at a slower pace (8.75 percent) compared to transactions performed via cashless means as people were encouraged during the pandemic to avoid unnecessary cash usage.