Ep20 Future of FinTechs and Cashless Economies

Show video

we have another great panel coming your way  right now speaking on the future of fintechs   and cashless economies it is a panel moderated by  riaz nachny who is going to be joining us on the   stage alongside anusha iqbal nada hassan and allah  deen el majer can i please welcome you all to the   stage please give them a warm round of applause  hi everybody hope your day has been good so far   a little hot today but uh hopefully we're in for a  cool uh discussion so uh i'd like to begin by just   asking each of our esteemed panelists to briefly  introduce themselves and talk a little bit about   what you do i'll go first so my name is aledin i  am you may know me from the disney movie aladdin   i've grown up since then and joined the fintech  space so i am the chief payments officer at hyper   pay for those of you who don't know hyper pay  hyper pay is one of the leading payment gateways   in the region so our job is to help merchants  accept payments either internationally locally or   with all the special alternative payment methods  in the market and so that's a little bit about   me a bit about hyperpay thanks uh aladdin my  name is anisha i'm the co-founder of spoti   we're a buy now pay data service provider that's  currently operating in uae saudi and bahrain   we effectively allow consumers to enhance  their spending power at checkout by giving them   deferred payment options um and we were recently  acquired by a international player called zip   code so now we actually have a presence in 13  markets so that's me in 30 seconds hi everyone   i'm katrel neda hassan my background is user  experience design so i'm an experienced designer   and for the past four years i've been working  with yap which is the first digital banking   application to launch here in the uae and i'm the  head of product experience there so we launched in   the uae back in september you can check us out  yap.com download the app give it a try fully   digital banking application and we're expanding  now to pakistan ghana and saudi arabia this year thank you all for those succinct introductions   now everyone here has heard the expression cash  is king it's almost a cliche at this point um   but i think what our panelists today will make  the case for is that this particular emperor   has no clothes now i think before we get into  the what it's important to look at the why   so i'd like to get all of your opinions on or  responses rather to this question should we strive   for a cashless economy in the uae and if so what  stands in the way and uh let's begin with nada   so um definitely the answer is definitely yes we  should be striving and i think the uae is doing   an amazing job of being the leader in the region  to actually go cashless and there's four points   that why that makes that so important number one  is convenience for the consumer and we know that   we're living in a country where it's all about  having a great customer experiences everywhere   you go and if we want to actually provide that  convenience for the consumer that's definitely   cash for society is definitely one of the biggest  benefits and also efficiencies for government   as well so making sure that we're dealing with uh  different ways of providing government services   instantly but also looking at how cash flow  societies helps us go away from a corruption   as an example so there's a lot of efficiencies  for governments there productivity for businesses   is another major benefit and with obviously  being a growing economy with lots of startups and   businesses here cashless does help provide a lot  more productivity and then fourthly is financial   inclusion so getting people more access into  the ecosystem of financial products and services   is um is extremely important and cashless helps  us to take it there as well yeah i mean i think   just adding to that i agree with everything that  you said is you know it's wondered convenience   more than uh customer journey we saw  this when uh with the changes that the   pandemic bought i mean we all know that uh with  everything shutting down physical stores even   uh for a certain period cash not being accepted  with deliveries uh people who had not used or had   not had the experience of that luxury did so for  the first time i think there's a there's a poll   almost 70 percent of uh users were actually doing  uh digital payments for the first time during the   pandemic which is a very high number but once you  went through that process uh i think going back   is is very difficult and so um i do agree also  with what the panelists the previous panelists   said which is that you're probably never going to  get to a cash zero society there will always some   form of cash um whether it's an older generation  using it whether it is simple convenience but uh   i think the the foundations for a cash flow so  moving in that direction have definitely been   set and all have been accelerated because of  the changes that the pandemic brought about   so i mean from my perspective it's more of  a regional aspect so i think the move to   cashless is going to be fueled by two things  obviously the governments play a big part in   terms of the regulation in terms of financial  inclusion as we said but there's there's a   there's another aspect where there are real world  problems that fintechs have to come in and fix   so there are still like if we look at the b2b  market today there's about like 90 of the invoices   are paid in cash not just in the uae we're talking  like on a on a scale across the region i mean i'm   talking like your supermarket in the street all  of that if coca-cola is delivering today they're   really expecting a cash transaction there so what  we really need to do is really have the ecosystem   in place to go for a cashless approach it's coming  where it's already we're already going through   that transformation but it's still we still  need more in the ecosystem to help that along   so more fintics is really also the answer there  thank you uh hello um and i think the key enabler   really for a cashless economy being pushed by by  fintechs is obviously uh technology and so anusha   what kind of technologies are the um  traditional retailers and businesses   uh adopting and how are these technologies acting  as game changers well if i just look at our own   business right um we evolved by facilitating  facilitating payments online which was   already in a cashless state other than the cash  and delivery element um for this but as as a   business has grown we're seeing the demand for  our service to buy now pay later has also come in   on the offline channels right so again making the  enablement of uh payment methods that were digital   bringing them into the offline world is one way  that retailers will be able to start moving away   from cash because you're effectively giving  them those those benefits um but it's i think   just picking up what allah was saying it's also  about the broader ecosystem and the way so for   us for example the way we operate um when we're  giving deferred payments with somebody whether   it's online or offline we actually have to rely on  quite a number of different elements to feed into   that chain whether it's a kyc check whether it  is understanding the consumer's ability to repay   and we actually do that by relying on a number  of other fintechs that are within the ecosystem   we're not doing it on our own and i think that's  what's been great is that you're getting so many   people who are specializing in different things  and feeding into that which then makes it easier   for people like us to then offer that cashless i  don't think a lot of people understand how many   people you need to be in the chain to get like a  bnpl approach like there's kyc there's id checks   there's all that so it really you have to have  that broad ecosystem i was talking about because   without that you can't make a risk assessment on  whoever is making you're taking the payment from   so effectively when we're looking at any country  today and we're doing a kyc check we really need   to have like an e identity before actually  rolling anything out on an ekyc approach so   there's a lot of stuff that really needs to come  into that ecosystem i was talking about yeah and   i think that feeds into uh another thing which is  the larger enabling environment that the state is   set up right they're allowing these businesses to  grow and develop and that's really i think what is   helping it's not just retailers it's uh you  know she was mentioning even the b2b segment   for example facilitating payments anywhere  is going to require a lot of people in that   chain and the more players you have uh the  easier it will be to become more digital   and um anusha i think another key element here  of course is um is trust uh you know whether   that's from a consumer's point of view or from a  potential partner's point of view and um on that   note um i'm actually about to try your service  for the first time on on sunday so i might tap you   out for some do it sooner some tips uh but what  what kind of strategies are being used to um to   actually gain the trust of traditional businesses  of small businesses um in order to actually uh   sell them the technologies that they need  it's such a it's such an important question   and when we were launching our business that was  actually one of the key things at the forefront   of of of our team it was how we're going to get  people to believe in what we're set what we're   saying which is you as a consumer are not going to  get charged for the service when they're so used   to having paid for credit to begin with right how  do you build that trust uh it's not easy it's not   overnight and it's a number of different things  brand awareness constant customer engagement so   you have multiple channels now it's which makes  it easier and difficult in a lot of sense right   you cannot just be on facebook anymore you  have to be on snapchat and twitter and and   so and so and so forth right and um i think  customer engagement uh allowing the customer   to have a voice and listening to that voice and  responding to it is is very important in building   not just your brand but that trust element  and then ultimately um that will resonate   across the ecosystem and i believe nada  had something sad on this no i'll just   add to that because i think that point is  really important um at the end of the day   we're building products and services that can help  benefit the consumer and as a business if you're   not putting your customer at the center of what  you do then you know you're not really you're not   going to end up being able to be competitive  or survive so when you are when you do have   these technologies and you are approaching these  traditional businesses and trying to get them   onboarded to this new you know fintech experience  or payments experience remind them of the consumer   remind them of the customer and how this actually  benefits them so bringing bringing that back into   the customer journey and the touch points that  they go through and the convenience that would   be available to them the technologies that  they traditionally wouldn't have access to   being able to embed it with with new businesses  and and products that can do that for them thank you uh andrew shad um now i'd like to  apologize to the audience in advance for the   term i'm about to use but uh certain sections of  the media have picked up and blended the terms   physical in the context of retail and digital and  they've they've come up with the word digital and   and i really really hate that and i i'm sorry now  uh ella let's move over to you um how can cashless   payment technologies actually help to bridge that  uh digital or physical and digital gap the gap   between physical stores and e-commerce platforms  to create a new breed of smart retailers so you   know although i don't agree with the term but what  they're trying to do here is is really marry the   convenience of an online transaction with the  convenience of having a point of sale interaction   and you know what what is what if you do  the if you go to the point of sale today   the checkout process is if someone uh punches  in on everything on the till and then they   present you with a point of sale poss for you  to use one of your preferred payment methods   the real goal is is that you know using all these  latest technologies ar or whatever is that you can   actually start doing your checkout process and  and they're seeing that with amazon with their   with their store where you just physically  physically go in you pick up the items you want   and you just walk out and boom the payments have  been done now the the challenge is how do you   actually transition that into a retail environment  like a dubai mall or the mall of the emirates   and and that's where you know there's  a marriage of all these technologies   and all together so the ar needs to understand  that you know someone picked up a dress   or and or the ai needs to understand that uh the  just been picked up and as there was someone's   walking around that the whole retail system talks  to uh either a wallet or it talks to a payment   method and boom the payment's been done and you  walk out so this is this is where retailers are   you know they're gravitating towards it it does  take a lot of technologies a lot of that's where   companies like ourselves come in so what we're  doing today is we're targeting really large   organizations and going look essentially all these  technologies where you you know we used to offer   were used to be given to financial institutions  you're gravitating towards financial institutions   today in terms of a technology setup why not to  take the whole stack and start implementing within   the organization under one under one so if like  a huge group like landmark has multiple brands   it doesn't make sense that each one of them has  a segregated system on terms of the payment side   just set up one group that manages the  payment side and push everything under that   and that way you know you're going to take  advantage of all the latest technologies obviously   but at the same time there's multiple  efficiencies in terms of like adding new   payment methods bnpl anything like that nice  assume the guys here have the same approach they would like to bridge the gap also in  terms of the physical yeah i mean and it's   not in my in my mind that term is literally  just following where the consumer is today   the consumer is everywhere it is omni-chan  you you have to be online you have to be um   in stores right so fidget is a term but i think  for me it's just uh summarizing again the consumer   journey and making sure that you're where your  customers and today the customers everywhere   i'll add to that as well with one example that yap  is dealing with with our expansion to ghana um and   ghana country in africa so one of the things  that's happening there is that we have this   digital banking app that we want to take  over to ghana where people are still the   mobile penetration is quite high but not on  smartphones so how are we going to provide a   digital banking product to people who are not  using these smartphones and this is where we   take a look at what they're doing day-to-day and  actually looking at how we can design a mobile   money experience through um you know just the  basic from a basic you know one of those old   school phones by using the sms technology and  it's it's again rethinking of your offering in   different ways that benefit then the consumer  that we can have more access which is extremely   important so accessibility and affordability  in the space is one of the main things that we   need to be thinking about when we are if we do you  know focus that consumer and look at the benefit   that we're trying to provide to them through  the digital experiences that we're designing   okay now uh ella i'd like to switch over to  the extremely thrilling and sexy subject of   regulation um now we've all heard you know at the  prior session to this today throughout yesterday   whether it was at the main stage or the fintech  stage right here we we've heard uh speakers um   extolling the virtues of the cashless economy  and it seems to be moving very fast however   are you seeing regulators being able to keep  pace with the rate of change at the moment and   um what what kind of challenges are these  regulators actually posing to your work   so what i have to say is like from our  experience the regulators have been   you know uh up to they're keeping up pace with  what what's going on in the market the problem   is is that you know regionally we haven't  had the learning experience that europe has   or the us has i always akin payments fintech  whatever is happening in the region to how   um like landlines were pushed you know they  didn't push out any landlines in africa they just   erected the 3g 4g antennas and boom you had all  the because it just didn't make sense and that's   exactly what's happening in the region is our  the consumer the merchants even the financial   institutions they want the latest technology they  want the latest offering out there so you know   bnpl is really fresh it's it's it's it's it's  it's like a new industry but effectively it's   it's you know we have companies here that are  offering it in the market so the regulators   have had to actually keep quickly get up to  speed on on the the new fintechs some of them   what they've done is they've set up sandboxes  to really understand what the technology does   how they can regulate and make sure for example  that they're protecting the consumer but at the   same time they're not impeding the the process so  we've seen like here in the uae so new laws around   uh retail payments we've seen uh in saudi sama  release laws also how to govern if you're issuing   cards if you're uh basically doing any payments  that there are the testifiers of financial   institution but also seeing it like in egypt now  also so um like they just announced a new law   where effectively everything has to be regulated  under the fra there so there is a there's a   obviously there's always going to be regulation  but it's really um it's not as impeding as we   expected it to be to be honest the regulators  have really done a good job in understanding   what the businesses are doing and they've tried  to um you know give them as much room as they   can within the regulatory environment and um allah  just to follow on from that what are some widely   held misconceptions you actually see in the market  with regards to regulators and the role they play   so i think everybody thinks of a regulator of as  a big brick wall that's going to stop everything   but effectively you know when you look at  it the sometimes what they're looking to   do is really to understand what the product does  that's one thing and then effectively be able to   you know tell you exactly what you need to do  because there are definitely some protection   requirements from a consumer perspective etc but  on the other side they're also trying to ensure   that there's a push towards as we say cassius  economy and the cassia society financial inclusion   is now a big player open banking is going  to be a big player so what they're trying   to do is to create a very good ecosystem under  a regulatory perspective to have that in place   so like most of our business in saudi is in saudi  so we've seen like sama come out with very clear   early adoption regulations for open  banking and how that's going to be used   um we're seeing in uh the same in in in in egypt  also in terms of the regulatory environment and   what they're trying to do is is really there's  there's really economic uh microeconomics going on   so what people don't understand in terms of the  region is that every country has a has a specific   approach to how they're dealing with the  regulations but there's also always a secondary   market that's going on so for example in egypt  there's a like a lot of cash being going around   in a secondary economy that no one knows about  or basically like if someone comes in and does   the plumbing good job for you you're gonna pay  them in cash and a lot of this is just literally   not captured so the regulator is really trying to  have fintechs come in and try to plug any of these   holds also so they can actually start capturing  what's going on and have a reflection on even   on the gdp of the country because i mean there's  been a few studies out there and probably you guys   have seen them that like moving towards the what  kovit19 has done for cashless and then for some   gdp and in certain economies has been transforming  like there's been three or four percent uptick   in certain gdps just behind the move towards a  cashless setup for certain uh certain industries   yes um absolutely i mean i i i work with visa  quite extensively as a client and that that   is something which they're always pushing um  particularly uh in the wake of the pandemic   the the shift uh digitization of payments by  small and even micro-sized merchants you know as   you said the street vendor um the souk marketplace  person yeah i mean in in saudi for example um   there was uh one of the the the regulatory  requirements that came out was like any any   supermarket had to start accepting um they had to  accept credit cards and they had to accept digital   wallets and they had actually a cap on how much  cash they could actually carry so like all of a   sudden you had a hockey stick uh acceptance on the  physical i think like uh media which is the local   scheme they hit their target within less than a  year for for what they wanted to do like in 2023.   so the same thing in egypt in egypt the regulator  came out with a program where they wanted to push   out like 30 000 points of sale in the market  and what they did was they subsidized all that   it's an amazing project like no one hears about  this stuff because you have to be in the industry   but effectively what they did was is that they  went to the banks and said look we'll finance like   all these points of sale push them out give us  send us the the the bill we'll uh we'll pay like   80 percent of it it's amazing like now like you  have uh this guy who has a what we call an arabic   like a small supermarket that sells anything in  the street and then he basically can actually do   like utility bills he can accept uh payments it's  it's crazy and that's being powered by simply the   qr code payments um actually it's you can accept  everything on it's basically what they've done is   is they pushed it out like to a fourier they've  pushed it out like to a man or all these guys   they're all fintics in in egypt and what they've  done is they're doing payment facilitation so   you know effectively they they just sign up  the merchant and they'll accept they they don't   have to go back to like a a bank to get all the  paperwork done so effectively like your average   like guy could could just take out a point of sale  machine and you can pay you can pay there and then   it's it's it's crazy and so anusha oh sorry to  what he was saying is that you know uh regulators   have the unenviable job of facilitating innovation  while protecting the structural integrity of the   economy and it's not something easy to do but our  experience with regulators you said they're not   a brick wall they're open to communication and i  think it's particularly our experience which has   been in bahrain saudi and uae we haven't  done much work in egypt but it's been um   they're extremely open to understanding new ideas  and giving the opportunity for new businesses to   grow as long as you're engaged with them so i  think that's the key it's about engagement and   they're they're they're very reciprocals it's not  a brick wall that you had so i mean even in jordan   they just released the law like a year ago and to  our detriment but it's good for everyone like they   basically capped the commissions you can accept  so basically they went like look because there   was like people paying like three and four percent  on credit cards they were like we're not going to   have any more of this it's like a maximum charge  is like two and a half percent straight away they   like people people know what they expect on the  on like what their expenses are for credit cards   okay thank you guys that's uh that was quite  illuminating um now nada i'm gonna ask you a sort   of macro question if you like um what do you see  as the future of the fintech industry across the   region and do you believe we're going to have more  collaboration or more competition going forward   so i think the future of fintech is a very  loaded question because you know there's so   many different things that can happen with all the  different types of businesses and fintechs that   are popping up the one thing that i see for the  future of fintechs that will actually be succeed   in in this region is those that actually focus on  impact and making a difference in the consumers   lives we're living in an age of the consumer where  if it works for the consumer if there's an impact   and there's a benefit to what we're doing and  providing then these fintechs will be able to   actually make a difference um and succeed in this  region otherwise you're just gonna have like we   can look around us at this conference and all the  you know all the different startups that are here   there's so much happening and there's so much  that we can do in the payment space in the   fintech space um but are we doing this to benefit  the consumer are we doing this to make an impact   in the customer what i see happening in the  future fintech is the consumer demand for   impact in their in their financial well-being  will be uh ex will will be what will lead   this space and that will require that goes  to your second part of your question that   will require collaboration because if we have um  digital banks like yap ourselves only focusing on   what we offer and not opening up our ecosystem  to other fintechs and other players to come in   to benefit the consumer we will not succeed in  making a difference in the consumers lives but   we'll also not succeed as a business and i think  it's a very important note for all fintechs and   all businesses in the space to really consider the  power of collaboration to open up their ecosystem   to open up their technologies to link through  apis or other new techs to to be able to link   all those companies together in order again at  the end of the day to benefit you the consumer   in your financial well-being and understanding and  making payments easily and quickly in financial   inclusion and of course in affordability of these  financial products we don't want to be creating   products that users can actually access because  you know it's it's costing them too much or   it's um it's they don't they won't have access to  it through specific devices or even in different   locations and spaces so that is that's how i sort  of see it and that's the type of um mental space   that our business thinks about every single day  when we're designing these fintech experiences thank you uh for that nada um i believe  we have a couple of minutes left and i   thought it might be a nice opportunity to uh  open the floor up to any any questions does   anyone have a question for our panelists  speak now or forever hold your silence wow no questions your responses were so clear  that they leave no room for questioning um   okay i i have a question unlike our  audience um now just cashless economies how   i know this was asked towards the end of the  last session as well but i'd like to have your   take on it how how far away do all three of  you see a truly cashless society uh emerging   um so i again i think i i i did agree with  what the last set of panelists said that   we're never going to be cash zero uh there  will be some form of cash but and i think   um everything that's happened in the recent past  has accelerated so if you'd asked me this question   said three years ago i'd say you know for  this region you're probably looking at   10 15 years and you know now that's probably been  outside the next five six years you'd be in a very   uh digital dominant uh economy as opposed  to cash less economy is what i would say okay um not so i i also think that we're just a  few years away from it if we end up in another   pandemic which inshallah we won't but if we do  then call us it's over no more cash and you know   we're seeing that the world you know when we think  about sort of this this space you know you have to   look at what's happening in the full ecosystem and  you know politically environmentally and we can   see that this is a trajectory that we're moving  forward to so i can't give a date but definitely   this is a society that we're we're moving forward  to so it's it's gonna happen very soon i believe   and and hopefully for the better and i don't think  just for the uae but when i look at the region   i work a lot in iraq as well i have a colleague  of mine who's right here from iraq and they just   launched the first digital bank in iraq and if a  country like iraq is also going to move forward   with um into this sort of uh you know cashless  space then you know who what's what's going   to stop it it's going to happen very soon  final thoughts hello yeah i mean the guys   hit the nail there uh i mean basically i'm i'm  i've been banging about uh cashless four years so   i mean i think we're very on the cusp of it  that's that's in terms of where we are just   uh needs a bit of a nudge here or there  and another fintech maybe so june of 2026 hopefully it's earlier because you know you  know we're always looking for that high kid   transactions to come in all right well thank you  so much um anusha nada um can you please give our   uh panelists a round of applause  thank you everyone thank you thank you you

2022-08-07

Show video