The number of buy now, pay later (BNPL) firms that have emerged over the past few years, especially in the wake of the pandemic, has exploded, highlighting rapid growth in the BNPL market worldwide.
In the Middle East and North Africa (MENA) region, four major United Arab Emirates (UAE)-based BNPL providers dominate the ecosystem with a common background of launching within months of each other during the crisis — PostPay in November 2019, Tabby in February 2020 and Spotii and Tamara in April and September 2020, respectively.
Read interview with Tabby CEO: Tabby Rides Alone Amid Increasing Consolidation in MENA BNPL Space
For Anuscha Iqbal, co-founder and CEO at Spotii, launching around the same time as the other players “was a good thing” as it brought the BNPL concept to life more rapidly and validated the need for the product in the region.
Moreover, she said the timing felt right because the continuing shift towards payments digitization and online acceptance, “one of the biggest hurdles in the region,” was thrust to the forefront during the pandemic and the need to address those pain points became even more apparent.
And less than two years after going live, global Aussie BNPL giant Zip finalized a deal to fully acquire the UAE FinTech firm in October 2021, a deal that has enabled Spotii to leverage Zip’s advanced technology and expertise to accelerate Spotii’s growth across the MENA region.
“Zip has a strategic vision to bring a lot of the markets together, and given their large international presence, their interest in Spotii is a good validation of our team’s technology and everything that we were bringing to the market,” Iqbal noted.
The value they are getting from Zip also extends beyond technological resources, she argued. Being part of the larger group has allowed the young player to access legal resources to better engage with “sophisticated” regulators for license applications in new markets such as Bahrain and Saudi Arabia.
“As a smaller business trying to engage with the regulator, it would be a struggle, but I had a whole team out of Australia solely responsible for engaging regulators around the world that I leveraged to be able to do my application,” Iqbal pointed out. “Those kinds of resources I wouldn’t have had available on my own.”
As in other regions, the BNPL space is extremely competitive in the MENA region with the four major players each vying for a bigger piece of the pie. As a result, firms like Spotii must create added value in order to turn sticky customers into loyal customers.
“What I think differentiates us today and what also probably attracted Zip to us over other players are our data and risk engine,” Iqbal explained, saying that with her co-founder’s background in data analytics, the firm has managed to individualize the experience for customers, who are each unique and have a different spending capability and purchase preference.
Read also interview with Tamara CEO: BNPL Was ‘Highly Needed’ Across MENA, Where Banks Now Play Catch-Up With FinTechs
She added that their analytics and risk engine give them a better view of the consumer’s affordability profile from the get-go, and unlike other players without access to the same technology, Spotii can accurately determine how much users can afford to spend.
The firm also offers consumers a dashboard where they can view a score determining how much they can spend and advises them on how to boost these scores to qualify for a BNPL loan.
See also interview with PostPay CEO: Virtual Cards Accelerate Buy Now, Pay Later in MENA
And with BNPL firms facing increasing criticism for the lack of responsible lending, Spotii’s technology stands out, allowing the firm to protect consumers and lend only to customers who can afford the product.
As Iqbal said: “The tools that we’re using to understand consumers’ profile [is what] really set us apart [from the others].”
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