To find out more about Visa’s latest initiative and ways of creating a rich experience in the field of electronic payments, Daily News Egypt interviewed Tarek Elhousseiny, Visa’s general manager for North Africa and the Middle East.
Visa just launched the first Everywhere Initiative in MENA to foster regional payments innovation. Can you tell us more about this initiative?
Everywhere Initiative, an innovation programme designed to encourage the development of the “next big thing” in payments, is expanding into the Middle East and North Africa (MENA) region. Entrants in Visa’s first-ever MENA Everywhere Initiative will have the opportunity to compete for a chance to win up to US$50,000 to support a development programme with Visa or through a business partnership with Visa’s clients, and potentially have access to Visa APIs, executive mentors, and technologists.
Visa’s Everywhere Initiative is part of a global implementation that is strategically important to the global payments company’s goal of fostering the growth of next generation payment technologies. Currently, it has nearly fifteen hundred participating Fintech startups across North America, Latin America, Europe, and Asia.
Each challenge has been structured all while keeping in mind the niche dynamics of the local landscape. As the region’s domestic merchants rapidly expand their digital commerce proposition, payment gateways also must evolve at a neck-to-neck speed to offer their customers a hassle-free shopping experience.
This initiative comes as we forge close cooperation with numerous distinguished partners like the Federation of Chambers of Commerce.
How do you see the acceptance footprint in Egypt, and how important are merchants to spreading digital payments?
Visa believes everyone should join the cashless culture. We are ready to put cash out of business and change the way you pay. Initial data from an upcoming Visa study finds if businesses in 100 cities around the world went cashless, they stand to experience net benefits of $312bn per year, with New York City businesses alone looking at $6.8bn in revenue and save more than 185 million hours in labour by making greater use of digital payments.
Visa is helping merchants use innovation to their advantage in order to stay competitively connected to their consumers. Visa release its “Cashless Cities Report” that looks at the benefits of going cashless in 100 cities around the world later this year. Some initial findings have indicated that when cities move from cash to digital payments, merchants could see benefits in the billions.
We have recently issued a report titled “Small Merchants, Big Opportunity: The Forgotten Path to Financial Inclusion”, and this report clearly says that the benefits of accepting digital payments are not readily apparent to most Medium and Small Merchants, MSMs. While traditional benefits such as increased sales, improved security, and reduced cash handling costs undoubtedly apply to merchants of all sizes, most MSMs in developing countries do not see these benefits as offsetting the investment required to begin accepting digital payments. While individually these businesses are small, their influence within the global economy is significant: they transact over $6.5tr per year and interact with more than 4.5 billion customers every day. Because these merchants typically have thin margins, low-income customers, small transaction values, and operate in cash-based ecosystems, little has been done to integrate them into the cashless economy.
A greater level of cashless acceptance among merchants—particularly the MSMs who are vital to the daily lives of unbanked populations—would provide low-income customers with more locations to use digital payment accounts and allow those accounts to serve as a gateway to greater financial inclusion. For the merchants, too, accepting digital payments is a key step towards increasing financial sophistication and exploring new avenues for growth.
As the cashless ecosystem grows in size, the benefits increase for both groups. MSMs provide a convenient place for customers to use their digital payment accounts and, therefore, a reason to keep money in the cashless ecosystem. But MSMs can also act as critical influencers of their customers and fellow merchants, as they are economic linchpins and, often, trusted members of their communities. Each of the 180 million MSMs across the developing world, serve 25 customers every day, on average, producing up to 4.5 billion daily opportunities to interact with and educate financially undeserved customers. The impact on MSMs themselves can also be significant: accepting digital payments enables merchants to establish a financial track record, thereby increasing their eligibility for more sophisticated financial services that they may need to sustain and grow their businesses.
How can mVisa help drive digital payments among merchants in Egypt?
mVisa is an innovative seamless and secure mobile solution for instant cashless payments that we just launched in Egypt. mVisa brings the benefits of easy and secure digital commerce to financial institutions, merchants, and consumers, and they are expected to help accelerate Egypt’s move towards a cash-light economy. To use the solution, merchants need to register for a unique Merchant ID issued by their bank. They can display this to consumers in the form of a QR or numeric code, enabling them to accept digital payments instantly and conveniently by alleviating the need for fixed point-of-sale technology and internet connectivity. mVisa also enables merchants to access their sales and transaction history easily on their own mobile app, while payments go directly and quickly to their bank accounts.
mVisa alleviates the need for POS infrastructure as consumers can send and merchants can receive payments using the mobile phones they already have in their pockets. mVisa is designed to digitise everyday spending, converting everyday purchases like groceries, fuel and bill payment to digital payments, and reducing the cash that cardholders withdraw from ATMs. This will also reduce the amount of cash that merchants handle daily. The launch of mVisa aligns with Visa’s mission to accelerate the acceptance of electronic payments in cash-dominant economies, supporting greater financial inclusion and transparency of financial transactions. The scalability and interoperability of mVisa allows these targets to be achieved in shorter timelines.
The advent of digital technologies created entirely new categories of commerce, such as eCommerce and mobile commerce, and has also created new ways to make purchases in the physical world such as tapping an NFC-enabled phone or wearable, scanning a QR code or simply clicking a button. As these and other new technologies are adopted by consumers, Visa will continue to innovate in payments so everyone has access to simple, convenient and safe ways to pay. Whether in a store, online, or mobile phone, Visa will continue to be the engine of commerce—making it as easy to pay on any device as it is to swipe a card.