Over 250 startups expected by 2020.

Jojo Puthuparampil is a business news writer for Inc. Arabia.

The number of startups in MENA’s fintech ecosystem doubled from 46 to 105 over three years from 2013, according to ‘State of Fintech’ report released by Middle East-focused payment service provider PAYFORT and Wamda, a platform fostering entrepreneurship in MENA.

The region could see over 250 more fintech startups being launched by 2020, according to the report which is said to be the first fintech (financial technology) research report covering the Middle East and North Africa.

According to the report, fintech startups have sprung up across 12 Arab countries. Three in four startups are based in the Egypt, Jordan, Lebanon or the UAE, with the Emirates accounting for half of these.

Collectively, these startups already employ around 1,600 people.

“Financial services and traditional banking are being challenged by innovative digital technology startups, offering simple, accessible and lower cost mobile solutions,” said Fadi Ghandour, chairman of Wamda.

MENA’s fintech startups provide a wide range of services to private, corporate and governmental partners.

Payments are the most developed of the sectors, with startups offering bill payment, electronic wallets, mobile and online payment solutions, including integrated payment services platforms.

Despite the rapid growth in the fintech sector, it still faces several core challenges: government and financial sector regulations, hiring and retaining talent and funding.

In fact, about one in four fintech startups shut down, with just 10% accounting for the majority of funding and hiring.

However, the report sees the light at the end of the tunnel, with new developments across the region promising to improve the chances for new fintech startups.

“We are seeing the drafting of a wide range of reforms and new regulations, around the region, at a government and financial regulatory level, indicating that policy makers are now better informed and have a clearer vision for innovation and what drives innovation,” said Omar Soudodi, managing director of PAYFORT.

“We are also seeing more talented people choose entrepreneurship over corporate employment and more professionals from the financial sector identifying fintech opportunities,” he said.

In January, PAYFORT, an online payment platform for e-commerce websites across the Arab world, acqui-hired fintech startup #Pay (pronounced ‘hash-pay’).

The fintech startup develops ways for merchants to send invoices via various channels, including social media, and receive money from their customers, via SADAD, credit card or bank transfer.

PAYFORT is a payment platform for e-commerce players such asSouq.com, Dubizzle.com, Landmark, BEIN Sports, Etihad Airways, Ticketmaster, Air Arabia, andTalabat.com.

These sites rely on PAYFORT to manage their payment processes securely so they can focus on improving the customer experience.