The Key to Solving MENA Banking Challenges Starts With Regulators

Card issuers might have it easy in regions like Europe and North America, but in the Middle East and North Africa (MENA) market, FinTechs have been completely held back from performing that service across the region.

“That’s a core reason why you haven’t seen companies building the Brex, the Revolut or the Affirm of the region — it’s simply because the infrastructure that they required to launch a payment program was not there,” Omar Onsi, founder and CEO of United Arab Emirates (UAE)-based FinTech NymCard, told PYMNTS in an interview.

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To build that kind of infrastructure, there is a need for banks that are open to work with FinTechs and have the capabilities, including people, resources, technology and risk appetite — all of which Onsi said “was not there.”

There was a lack of technical infrastructure, as the market was served by legacy processors that were used to serving banks for 20 years and didn’t know how to engage with FinTechs.

“So, the market didn’t exist and that’s the core reason why you haven’t seen that kind of FinTech innovation happening across MENA,” he added.

It’s a gap that the UAE-based firm is trying to fill for other FinTechs today, providing a platform where they can plug-and-play ready finance into their applications through NymCard’s 150+ application programming interfaces (APIs) without worrying about what’s going on in the back end and instead “focus on the gap that they’re seeing in the market [and] how fast they can fix it,” he explained.

Founded in 2018, the company works with a broad range of financial institutions in the MENA region on services that include money transfers, youth banking applications, corporate card propositions, last mile disbursements, loyalty programs, on-demand delivery services and buy now, pay later (BNPL) offerings.

Read more: BaaS Provider NymCard Raises $22.5M

Earlier this month, the Abu Dhabi-based card issuer and Banking-as-a-Service (BaaS) provider, which also has a presence in Saudi Arabia, Egypt and Pakistan, announced it had raised $22.5 million in a new funding round, bringing its total financing to more than $35 million.

The funds have been earmarked to further expand its business in its core markets through key local partnerships and setups.

See also: FOO and NymCard Offer End-to-End Payment Solutions to MENA Business Owners

“I’m a big believer in partnerships and a big believer that FinTech as an industry is just a big piece of the puzzle. And each player can solve one or two pieces, no one can solve the entire puzzle by themselves,” Onsi argued.

Solving the Scaling Issue With Technology

Scaling a business across the fragmented MENA market can be quite a challenging task, which is why Onsi suggested learning from Europe, even though he acknowledged it won’t be an easy undertaking.

“In Europe, you can get one license in one country and passport that license across more than 30 markets,” he said. “That would have been the ideal setup across MENA, but it’s much more complex to accomplish that.”

It’s a problem they’re trying to solve with technology, through partnerships and working closely with regulators and local banks across the region, Onsi said — making it easy for a FinTech that signs with NymCard in one market to passport their programs and products across all the markets that the firm is set up in.

“That’s the vision that’s driving us. How can we create that one economic zone using technology to enable our clients to scale across the region without that fragmentation?” he explained.

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To help FinTechs tap into NymCard’s license network and technical infrastructure, the company publishes all its APIs for anyone to access, and as Onsi noted: “We don’t drag you for three months or make you sign an NDA to get access to our APIs. Everything is there. Our clients can log in and start using our sandbox APIs within minutes.”

See also: Deep Dive: How FIs Can Capture the BaaS Opportunity to Engage Digital-First Customers

Plugged Into MENA Ecosystem

To solve the challenges unique to the region, Onsi stressed the need to be plugged into the ecosystem to be effective.

“You need to have the whole management team [physically present in MENA] working day in and day out building relationships with the regulators and banks and understanding the client problems, or else you’re not solving anything for the region,” he said.

And it seems focusing NymCard’s attention on MENA-specific problems and diverting all the business’ attention towards cultivating the relationships required for a healthy FinTech ecosystem in the region will continue to be the focus moving forward.

As Onsi said, “[NymCard] is not trying to serve the whole world, we are laser-focused on solving the MENA problems. You will never see us in Europe, the U.S. or in parts of Asia. You will see us very plugged into the MENA to make sure we are super-localized for the problems which are unique to [the region].”

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