UK fintech Total Processing to expand to Saudi and Egypt

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• Payments company set up in the UAE in late 2021
• E-commerce and government digitalisation projects to boost sector 
• Saudi aiming for 70% digital transactions in 2030, from 18% now

Online payments firm Total Processing plans to start operating in Saudi Arabia by the middle of 2023 and then in Egypt, after achieving 30 percent month-on-month revenue growth since it launched in Dubai in 2021. 

The company, headquartered in the UK, has witnessed strong growth in the Mena e-payments sector as e-commerce booms and governments digitalise their services, its regional managing director Danny Makin told AGBI. 

“When we first set up in Dubai in November 2021, we thought it would just be a sales office to service the region – similar to what a lot of our competitors were doing at the time,” Makin said. 

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“But we quickly realised we needed to leverage our technology and support services, too, because there were so many companies wanting to improve the way they handled online transactions.”

In its first year of operation in the UAE, Total Processing secured 130 local clients – including Addmind, Healthylicious, Virtuzone and No More Bottles – and grew its headcount from two to 19. It is now looking to expand its regional offering by establishing teams in Saudi Arabia and Egypt. 

“Saudi Arabia is my main focus for expansion because of the size of the market and because of Vision 2030,” Makin said.

The kingdom’s economy and population is among the largest in Mena and its strategy for developing the non-oil economy includes facilitating business creation and accelerating high-growth sectors such as technology and e-commerce.  

“We want to have feet on the ground in Saudi by the middle of 2023,” Makin said. 

“With Egypt, it’s about the size of the population and the fact that its payments ecosystem is a little bit further behind than the UAE and other markets, so there are good opportunities there. We hope to set up an office there by the end of the year.”

Founded in 2015, Total Processing services around 3,000 clients from its offices in Manchester and Dubai. It provides funds transfer, clearing and settlement services for online transactions through customisable software, and offers consultancy services to retailers and other businesses looking to adopt payments technology. 

The e-payments industry is expanding rapidly all over the world, driven by the e-commerce boom. The Middle East and Africa is one of the fastest-growing regions, with its online payment gateway industry forecast to grow on average 28 percent year-on-year to $21 billion by 2028, from $3 billion in 2020, according to research by RationalStat in July. 

The Mena e-commerce market is expected to touch $48 billion by the end of 2023, with Saudi Arabia and the UAE leading the way with annual forecast growth of 40 percent and 38 percent, respectively, RationalStat said.

The region is also experiencing a shift away from the “cash is king” mentality that held sway for decades. Saudi Arabia has set a target that at least 70 percent of all transactions will be digital by the end of 2030, from 18 percent today.

Non-cash transactions in the UAE are already growing faster than in the kingdom, and are expected to account for 73 percent of payments in 2023, up from 39 percent in 2018, according to separate research conducted in April by the Mena Fintech Association. 

In Egypt, almost 65 percent of the population is unbanked and the government is working to digitalise payments systems among other strategies to increase financial inclusion. 

This landscape presents lucrative opportunities for companies such as Total Processing and its competitors, Makin said. Its rivals include Strike, Checkout and Adyen, all of which have recently set up offices in Dubai. 

One of the steps the UAE authorities have taken to open up the market is to introduce licensing rules that in some cases remove the legal requirement for payments processing companies to partner with a local acquiring bank to provide services in the country. An acquiring bank is a bank or financial institution authorised to process credit or debit card payments on behalf of a merchant. 

The UAE Central Bank announced the rules last July and provided a one-year transition period to providers to apply for the relevant licences. 

“What this has done is allow bigger, global players to come in and operate independently,” Makin explained. 

“We would like to continue to work with acquirers as they have a deep understanding of the local business environment.”

Even without one of the new licences, Total Processing’s UAE office has processed more than AED200 million ($54 million) of transactions up until near the end of 2022, representing 30 percent month-on-month growth, he added. 

Makin said the company aims to tackle industry challenges such as delays in onboarding clients due to strict Know Your Customer rules, cyber-crime and related security hazards, and a high rate of payment non-approvals. These non-approvals – around 40 percent of transactions in the UAE – are sometimes connected to the range of currencies that payments software can accept, he added.