elerate Payment Efficiencies Accelerating Payment Efficiencies with Faster Fintechs
Peter Johnson- Jan 9, 2024
- 4 min read
Fintechs that are faster can stimulate growth. Accelerating expansion could be made possible by quicker fintechs.
The payments technology sector has flourished in recent times. From contactless transactions to biometrics, fintechs have pushed to meet the rising demand for fast payments. Covid hastened the advancement of such technologies, though according to Imad, the biggest impetus has been modifications to the formerly rigid regulatory structure. This has made way for extraordinary companies to tackle one of the foremost problems SMEs in the UAE encounter: cash on delivery.
Despite undergoing rapid technological growth, the United Arab Emirates is still largely a cash-based economy.
The UAE stands out among nations when it comes to payments due to its high levels of credit card and mobile phone penetration at 48% and over 200% respectively. Despite this, cash on delivery (COD) remains the dominant payment choice, with a whopping 51% of all ecommerce payments processed in this way. Cash is still undoubtedly the preferred payment option, likely due to its ease and familiarity for businesses and consumers alike. Unfortunately, a study performed by Mamo discovered that the first attempt at cash payments can incur a hefty additional cost, as high as 5% of total transaction cost, that is passed on to the consumer.
The drawbacks of cash that are not immediately apparent are the invisible costs associated with it.
The unseen expenses of cash are those that are not obvious at first glance.
Despite its reputation, cash may not be the most frictionless form of payment. Imad delves into the logistics of cash and finds that, as the number of cash payments increases, the number of trips to the bank grows as well, leading to higher fuel costs, wages for the driver and other expenses. This all adds up to an estimated 5%, compared to the 1–2% typical of digital payment systems.
Technology has created numerous challenges in the present day.
The current landscape is filled with obstacles that transcend any technical capability.
Imad notes that the advantages of fintech innovation in the payments sector are obvious, yet the issues are both intricate and loaded with long-standing friction. Banks must take a more progressive stance in order to foster a more modern economy. Despite the abundance of consumer borrowing, numerous innovational companies still face difficulty securing essential financing.
The worth of time is immense - it cannot be measured.
The importance of time is enormous; its value is immeasurable.
An internal Mamo analysis suggests that UAE citizens spend over 100 billion minutes a year on financial administrative tasks, which is enough time to construct the Burj Khalifa 50,000 times over. Imad is of the opinion that fintechs will be instrumental in reducing this excess time, thereby allowing companies to invest their resources into more productive pursuits. To facilitate this outcome, Mamo has two different products. One enables users to make peer-to-peer payments, while the other allows businesses to accept payments, execute repeating payments, and handle other financial administrative responsibilities. With a combination of these two products, Imad envisages that Mamo can help save billions of hours for both businesses and individuals.
For a start-up to be successful, certain ingredients are necessary.
In order for a start-up to have a good chance of flourishing, certain components are essential.
Imad presents three tips for new start-ups, with young founders in particular needing to take note.
Obtain a suitable team. This can be difficult for a new business, which may have little recognition or reputation in comparison to its more established competitors. Nevertheless, this is the most essential measure for the success or defeat of your start-up.
2. Invest in your human capital. Your team is the most valuable asset you possess, and the right human resource department will ensure it runs optimally. A proficient human resources manager will ensure you reap the maximum benefit from your team and even locate sought after talent.
Establish user trust. To effectively reach objectives in the fintech domain, user trust is critical. It is not enough to construct a satisfactory product; it is necessary to make sure your brand is a part of the memory of your ideal user. As a startup, you're not just taking part in a battle with larger organizations for talent, but also for market share and user recognition.
The special requirements of the Middle East and North African (MENA) market must be taken into account.
The distinctive needs of the Middle East and North African (MENA) market have to be considered.
Imad has a high opinion of his UAE customers, noting their excellent responsiveness and communication. Every time Mamo releases a new product, there is a wealth of customer feedback which Imad has used to create an accurate representation of what regional customers desire. Essentially, they want to acquire more wealth and customers, dictating the current and future needs for features and services.
The upcoming years offer much potential for the payment sector, with payments technology continuing to evolve and create new opportunities. Looking ahead, we can anticipate further advancements in this area to reach new heights.
Mena remains largely a cash-based economy, however, the expansion of financial services is unveiling a range of opportunities. Seeing technology as a key factor in the progression of banking and payments, Imad envisages a promising outlook for businesses and consumers. Thanks to technology, there can be a minimization of consumer debt, easier availability of financial management and wealth augmentation tools, along with the emergence of new avenues of investment. Even though MENA remains cash-based, numerous inventors like Imad are spotting the potential of a digital economy and rapidly moving towards it.
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