The Palestinian Fintech ecosystem is nascent. It has however followed global trends when it comes to the increased interest and efforts of policymakers and regulators as well as other relevant ecosystem players to foster it. Especially the last two years have brought remarkable developments that hold promise for the future.
The Palestinian Fintech ecosystem is nascent. It has however followed global trends when it comes to the increased interest and efforts of policymakers and regulators as well as other relevant ecosystem players to foster it. Especially the last two years have brought remarkable developments that hold promise for the future. This Fintech Landscape aims to give a simple overview on the developments so far.
The Palestinian regulators have been taking different initiatives to enable innovation and promote Fintech. These initiatives include the launch of the PCMA Innovation Office Ebtaker, which has seen several applications and issued 2 no objection letters   since its launch in March 2021. The PMA introduced its Fintech Regulatory Sandbox to allow time-bound testing of Fintech innovations under their oversight. It also created a Fintech Taskforce aiming to encourage public-private dialogue and unify Fintech promotion efforts.
The introduction of E-Payments (including E-Wallets) for person to government payments is being piloted and was accelerated by the COVID-19 pandemic. The PMA also joined forces with payment service providers (PSPs) and social media influencers to raise awareness on the advantages of digital financial services. The regulators’ initiatives have been supported by GIZ’s project “Alternative Approaches to Financial Inclusion of SME” (A-FIN).
Accelerators and Incubators
There are several Palestinian incubators and accelerators, but only two of them have a Fintech focus. One of them is Intersect Innovation Hub, which implemented Palestine’s first Fintech Ideation Hackathon in 2021 and announced the launch of a Fintech Incubation Programme in March of 2022. The other one, Flow Accelerator, provided an incubation program (Fintech Camp) to raise awareness about Fintech among young innovators and entrepreneurs at the end of 2021.
Further accelerators and incubators have been active participants of Fintech promotion activities by the regulators such as the Fintech Taskforce as well as regular exchanges and discussions.
The Interest of the Corporate Sector and Incumbents
The interest of larger corporates and incumbents to tap on the potential of Fintech differs. While the telecom company Jawwal’s initiative was one of the first E-Wallet providers licensed and the Bank of Palestine has been part of a joint venture behind an E-Wallet and powers Intersect since 2020, other banks and non-banking financial institutions are lagging. Nevertheless, recent developments such as the Palestine Investment Bank introducing an E-Wallet, the National Bank supporting the Flow Accelerator Fintech Camp and the Palestine Insurance signing an MoU with an Insurtech shows a noteworthy increase in the interest for Fintech promotion and cooperation.
The number of Fintech operating, and Fintech entrepreneurs interested in operating in the Palestinian market has increased remarkably in the last 2 years. According to the Landscape Report, especially the payment and money transfer field has seen a steady increase since 2020 with the licensing of 6 payment service providers. The number of Ebtaker applications and no-objection letters provided by PCMA to Naviatx and Tamweeli, indicate in addition a high interest in non-banking Fintech solutions, particularly in the field of Insurtech.
As of the rest of the Fintech, most of them participated in the above-mentioned ideation and incubation programmes. Despite that these Fintech are still in ideation or early stages these developments indicate an increasing interest in Fintech and on the potential of the Palestinian market. The Landscape Report indicates in addition that there is still plenty of room for already established Fintech from the region to come to Palestine. Particularly now that the regulators have opened their doors and launched the Innovation Office and the Regulatory Sandbox, more applications and market entries are expected that will certainly shake the market and keep the ball rolling.
By Sofia Bublatzky
The information of this Blogpost was gathered through research and exchanges in January 2022 and is subject to change throughout time.