Egypt’s Paymob in Gulf expansion drive following $50m funding

Supplied/Paymob

• ‘Tremendous opportunity’ for fintech products serving SMEs
• Launching tap-on-phone payments in UAE, and Saudi next on horizon
• Predicts rise of digital wallets, BNPL and one-click checkouts

Paymob, the Cairo-based payments facilitator, is seeking to expand into Saudi Arabia after its recent debut in the UAE market.

The company is also launching tap-on-phone payments in the UAE this year following its partnership with Mastercard to offer the service in its home market in 2021.

“We see a massive opportunity to serve this market segment,” said Omar El Gammal, Paymob’s executive vice president of global business development.

“Our goal over the next three years is to empower thousands of merchants with the latest payment technologies to fuel their growth and further digitise the economy. We feel that there is tremendous opportunity for fintech products, especially those that serve SMEs [small and medium enterprises].”

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El Gammal added that the UAE is a “dynamic ecosystem” and a good fit for Paymob as it fosters entrepreneurship and innovation, with over 400,000 businesses operating, the majority of which are SMEs and micro-businesses.

Paymob has appointed Emirati financial services professional Omar Haddad as its general manager for the GCC based in the UAE, who will lead a team of over 150 employees. 

The expansion into the UAE –  described by El Gammal as an “important milestone” in Paymob’s global growth ambitions – has been supported by $50 million Series B funding secured last year, which is also being used to expand Paymob’s product range. 

“Our Series B was the largest fintech Series B in Egypt and brought our total funding to over $68.5 million, making it one of the most funded companies in the region,” El Gammal told AGBI.

He also revealed that Saudi Arabia is “very much on the horizon” as the company looks to expand further across the GCC. The kingdom is poised to launch three digital banks over the next 12 months, plus new regulations, as part of its aim to become a major player in the fintech industry.

Last month, Nezar Alhaidar, director of Fintech Saudi, an initiative set up by the kingdom’s central bank, said the sector is “on the cusp of being propelled onto the global stage”.

In the same way that the UK and Singapore have positioned themselves in Europe and Asia respectively, Saudi Arabia is seeking to become the gateway for fintech activity in the Middle East. 

El Gammal described the fintech industry as one of the stronger sectors when it comes to growth and attracting capital in the region. 

According to RationalStat’s latest analysis, the Middle East and Africa online payment gateway is estimated is expected to reach $21 billion by 2028, growing at an annual rate of 28 percent.

It added that Saudi Arabia, Egypt and UAE offer “lucrative opportunities” for online payment providers as they are the leading e-commerce markets in the region.

El Gammal said: “It is likely that we will continue to see the rise of digital wallet adoption among consumers. SMEs, particularly in the UAE, have been quick to embrace digital wallets.”

He added that the Buy Now Pay Later (BNPL) market is “not showing any signs of slowing down” and is continuing to mature, as it gives consumers greater autonomy over managing their finances.

The demand for one-click checkouts will also increase as more people want fast, simple and secure checkout experiences, he said. 

“The fintech sector in the region is booming with new innovative products and services. However, collectively our greatest competition is cash. So, every new product or service that goes into the market helps educate consumers and advance digital payments adoption.”

El Gammal said that empowering SMEs across the region is key to growing local economies, citing the situation in Pakistan. 

Pakistan has five million SMEs with only 96,000 point of sale devices in the market deployed at less than 35,000 unique merchants. This represents what El Gammal described as a “massive opportunity” to deliver financial technologies to these arguably underserved businesses. 

“Pakistan’s fintech ecosystem is nonetheless very promising – the country has tele-density of over 88 percent and smartphone adoption of over 52 percent, creating a ripe market opportunity for fintechs to capture. The payments segment is most likely to be the fastest growing industry in Pakistan, leveraging the potential of the untapped market,” he explained.

According to the Pakistan Institute of Development Economics, the country has the potential for significant fintech growth due to its increasing youth population, disruptive internet and smartphone penetration and booming e-commerce market.

“We are determined to bridge the gap between SMEs and access to digital financial solutions to help grow their business,” said El Gammal.

“We are enabling SME merchants to expand and for large international merchants to aggregate and localise the rich landscape of the alternative payment models across the region.”