Banking & Finance Why Pyypl power will accelerate MENA fintech growth By Andy Sambidge June 1, 2022 Supplied Antti Arponen plans to expand his fintech company in countries including Oman, Egypt, Morocco and Zimbabwe following a $11 million funding round The founder and CEO of Pyypl tells AGBI about ambitious expansion plans for the UAE-based company Already one of the fastest-growing fintechs in the Middle East and Africa region, UAE-based Pyypl is planning to “inject more petrol into the tank” in a new phase of expansion. Antti Arponen, founder and CEO, told AGBI that the company, which provides digital payments and financial services for smartphone users without the need for a bank account or credit card, has a “strong pipeline”, with Oman operations set to launch soon. Following a successful $11 million funding round, Pyypl (pronounced People) is keen on strengthening its position in Africa where the likes of Egypt, Morocco, Zimbabwe, Sierra Leone, Nigeria and Uganda are on the radar. “We’ve grown the company [business volumes] about 10 times bigger since we started the process,” said Arponen about the funding which was backed by investors from Europe, North America, Asia and the Middle East and was over-subscribed. “We’re finalising our next funding round as we speak and will again try to grow about three times with that one… It’s sensible to inject more petrol into the tank right now,” he said. Pyypl is targeting growth in Africa at a time when the digital transformation of customs and borders is expected to yield trade gains on the continent of $20 billion a year. According to a World Economic Forum report published on Tuesday, a number of African countries are making efforts to build better trade networks by embarking on more integrated digital reforms that can drive higher impact through public-private partnerships. Arponen, who previously worked at Virgin Mobile in MENA, said: “Appetite from investors is strong. We’re in the right industry at the right time, the right geographic area and have an experienced team of 150 people.” Reaping the rewards of choosing the “hard path” The CEO said the company plans to reap the rewards of decisions taken at the beginning of the Pyypl journey. “We chose the hard path about four years ago. We decided to build our own technology and wanted to be regulated and independent so we’re not piggybacking on anybody else’s regulatory approval. That’s a difficult thing to do but when you fast forward to today, we’re in a position where we can go to new markets every quarter, fully regulated and with our own tech,” he said, explaining that regulatory approvals typically take three to four years to be granted. “We see that in the Middle East and Africa there’s so much potential. It’s the fastest growing e-commerce market, and one of the fastest mobile app markets. The demand for services is growing. We’re expanding into multiple markets. We have a pipeline of advanced approval notices,” he added. Currently operating in the UAE, Bahrain, Kenya and Mozambique, he said he expects to be in “six or seven countries” by the end of the year. What’s driving the Pyypl success story? The MENA region has two billion people and has a high adoption rate of smartphones. Despite this, the majority go without access to essential financial services and there is no multi-billion dollar fintech company, such as Revolut (Europe), Chime (North America), Nubank (Latin America) or Ant Financial (Asia). Arponen said swathes of people, while having a mobile phone and internet connection, are either unbanked, or under-served in their daily financial services. Pyypl’s card services have been used by its customer base at thousands of merchants globally, in over 100 different currencies, by customers of more than 100 nationalities. With connections to global financial institutions facilitating cross-border money transfers, Pyypl’s solutions cover key remittance corridors in the region, and Arponen said this is one of the biggest growth areas for the company. It recently became the first company in the Middle East to deploy a Blockchain On-Demand Liquidity solution for its customer cross-border transfers, in partnership with Ripple. Earlier in 2021, Visa and Pyypl announced a Middle East and Africa strategic partnership agreement. Pyypl’s 150-strong team is managed by senior executives, who have held C-suite positions in the MEA region for companies such as Virgin, UBS, Sberbank and Mastercard. Arponen sees the rise of e-commerce continuing to drive the sector in the short-term. He also predicts the launch of central bank digital currencies will be “transformative” to the financial services industry – a digital form of a country’s fiat currency issued and regulated by a nation’s monetary authority or central bank. “This will be a game changer because it’s a regulated way of doing financial transactions with no middle men so it’s instant, cost efficient, safe, and avoids currency fluctuations… It will be transformative but it will take a few years,” he said. Many central banks around the world are working on digital currency projects, known as CBDCs or Govcoins. Remittances from workers, which make up a market of $48 billion per year, are understood to be one of the most pressing use cases for the move. The Central Bank of the UAE last year announced it is to issue its own digital currency as part of its 2023-2026 strategy which aims to position it “among the world’s top 10 central banks”. But the breakthrough may come from elsewhere, according to Arponen. “Our bet is it will be one of the African countries that will drive this, get it out of the door first and make it operational,” he said.