Legacy Cash-On-Delivery Process Hinders Growth of MENA P2P Payments

Peer-to-peer (P2P) payments like Venmo, PayPal and Cash App have risen in popularity in recent years, providing rapid, convenient solutions that enable customers to send and receive money anywhere and anytime.

United Arab Emirates (UAE) FinTech Mamo is contributing to that growing trend in the Middle East and North Africa (MENA), where disrupting the cash-on-delivery process that still prevails in the region’s cash-heavy economies is required to drive P2P payment growth for individuals and small- and medium-sized businesses (SMBs).

“SMEs are tired of cash-on-delivery because of the operational hassles associated with it. For example, if you deliver products or services and your customer comes to make a payment and they don’t have the right change, you have to send your driver back and forth a few times,” Imad Gharazeddine, CEO at UAE-based FinTech Mamo, said, highlighting the challenges in an interview with PYMNTS.

That leads to a significant yet hidden cost, he said, one that the FinTech firm is looking to eliminate through its products Mamo Pay for individual money transfers and Mamo Pay for Business.

“Mamo Pay for Business is there to essentially simplify those [money] flows for SMEs so that they can spend time focusing on what it is that they do best, rather than focusing on reconciliations, accounting and basically chasing customers for payments and invoices,” he added.

And according to Gharazeddine, most of the demand and interest they’re seeing on the market lies in SME payments due to the sheer frequency and volume of those payments, even though digital wallets for individuals continue to gain traction.

“On the P2P side, you may have the need to pay back a friend maybe two or three times a week at most, but on the business payments side, we have customers who transact up to 500 times a month so that pain point immediately gets multiplied by 500, which makes it a far more compelling problem to solve,” he noted.

Fear, Risk Aversion Hinder Partnerships

According to Gharazeddine, the biggest challenge for Mamo and most FinTechs in the region is the lack of tightly knit partnerships that are needed to enable the ecosystem to thrive.

“It’s important that the entire ecosystem embraces [partnerships] because no one company can take on this [challenge] by themselves,” he argued, adding that “the sooner we do that, the sooner I believe that the entire ecosystem and economy is going to be able to provide competitive products and more useful products for citizens and residents.”

At the root of that setback is fear and risk, he said, referencing the high-risk aversion of compliance departments, banks and financial institutions.

It’s going to take a shift from a risk- and fear-based mentality to being open to opportunities for partnerships to start becoming a reality, Gharazeddine said.

But in the meantime, the Dubai-based FinTech will be focusing on onboarding more SMEs and expanding to Saudi Arabia, one of the region’s top FinTech markets.


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