PayPal’s Egyptian Progress Report

PayPal has been available in Egypt for nearly two months now, and operations have been off to a good start.

PayPal is still finding a leg to stand on in the Egyptian market, but since its launch customers have shown great enthusiasm.

According to Daily News Egypt, who spoke to the MENA region’s PayPal CEO, Elias Ghanem, the adoption rate and volume of services have increased significantly in Egypt.

Ghanem said that the social media interaction with Egyptian customers has been very positive as well.

“Finally PayPal is here, now I am connected to the world,” one commenter posted on Twitter, as Daily News Egypt reported.

Attempting to trace back PayPal’s steps and tactic, Daily News Egypt asked what convinced PayPal to expand into Egypt.

Ghanem explained there were three important factors that motivated PayPal to take on the rapidly growing market.

The first influential element was the country’s infrastructure. In this case, infrastructure means the quality of Internet connectivity within a country. PayPal needed to wait for the Egyptian Internet to gain stability and increase penetration.

Despite a few complications with social media riots and Internet blocking, Egyptians have made substantial effort to expand the availability of the Internet.

The second element that needed measurement before PayPal could make the decision to launch was the payments landscape in Egypt.

In order to make a PayPal payment a user must have a bankcard with which to link to the account. Egypt proved to have a reasonable card penetration rate, especially with debit cards. Egypt has a lower credit card penetration, but there is still enough card usage in the country to allow PayPal to hit the ground running.

Finally, the third element that influenced PayPal’s entrance was supply. Supply refers to a growing online shopping ecosystem. Egypt needed to have consumers who were looking to shop online, as well as merchants who wanted to sell products and services on the Internet.

Egypt, similar to many countries across the MENA region, has had a rising number of merchants moving to the online marketplace. Merchants were looking for a way to expand their reach. It became ideal to sell both locally and internationally in order too maximize profits.

Egypt earned checkmarks in all three of the boxes, which signaled to PayPal that it was an opportune time to enter the market.

Moreover, Egyptians illustrated keen interest in online activity. In the last five years, over 17 million people have become Internet users.

To highlight the significance of this figure, Daily News Egypt reported that 18 million Americans joined the Internet in the last five years. Taking into consideration that the Internet is much older in the United States, it became evident that the appetite for Internet usage within Egypt was growing at a fast rate.

Alas, Ghanem explained there are still challenges PayPal must overcome. He said the biggest challenge was consumer awareness. Not only must the company continue to spread the word, it must make sure to help customers understand how to use its services when buying online.

Another present obstacle is the natural divide inflicted on the consumer-merchant relationship when transactions are done online.

Ghanem explained, “I think the biggest challenge the online industry faces here is trust, or lack thereof. In the Middle East, it is all about face-to-face, shaking hands, who I know and who you know. But when it comes to the Internet, there is a wall between us.”

In terms of marketing strategies, Ghanem said there was a threefold process.

The first phase, which has already passed, included allowing the public to talk amongst themselves on social media.

The second phase, which PayPal is currently in now, takes marketing to the next level of social media. This means PayPal is interacting more with the public on social forums and trying to get the message to go viral.

Soon the third phase will arrive, which will involve creating new partnerships with local banks and partners who have large merchant networks. Ideally these partnerships will help to further promote PayPal’s’ new services in Egypt.

Besides new marketing avenues, PayPal announced it is working to offering a complete Arabic-friendly experience with its services.

In the future PayPal plans to offer Arabic language online, which would include email and voice. PayPal is excited for these new features, but admitted it was no easy feat. It could be many months before MENA consumers can expect to see these services launch.

To read the full story at Daily News Egypt click here.