Daily News Egypt interviewed Gaber to find out the future of Visa, FinTech in market, the transcript for which is below, lightly edited for clarity:
How do you find your participation in Seamless NA 2019 and what is the strategy behind sponsoring the FinTech competition?
Seamless NA 2019 is an opportunity for us to showcase our cooperation with the government in Egypt to support FinTechs and create the enabling environment needed for their growth. We are working on the enablement and empowerment of new ideas to face the challenges affecting the spread of digital payments culture, as well as realise the opportunities that come with each challenge.
Our sponsorship of the FinTech pitch off and our FinTech support programmes signify Visa’s commitment to being the most responsive and supportive network for both emerging players and long-term partners alike. Our recently announced FinTech fast-track programme highlights how we work on making it simpler and quicker for early stage start-ups to connect with our network than ever before. Through providing rapid onboarding and reduced fees, we will help early stage start-ups gain access to the capabilities that lie within Visa’s global network to power their own ideas. Visa’s strength lies in our network. Its reach, security, and capability powers commerce on a global scale by connecting 3bn Visa accounts, 46 million merchants, and 16,000 financial institutions.
We also launched the Visa Everywhere Initiative: Women’s Global Edition, which is a new global competition that tasks women entrepreneurs to solve FinTech and Social Impact challenges for the opportunity to win up to $200,000 and a chance to collaborate with Visa. Since 2015, more than 4,000 start-ups have participated in 23 Visa innovation programmes and have collectively raised over $2.5bn in funding. The programme has selected more than 215 finalists and 70 overall winners and touched over 75 countries across North America, Asia Pacific, Latin America, Europe, and the Middle East/Africa.
One of the most interesting shifts that the market has undergone in the last 5-10 years is how much more open it is in networking and sharing ideas. Meet-ups, networking events, hackathons, Visa’s Everywhere Initiative, a global innovation programme that we’ve run in various markets in CEMEA, that tasks start-ups to solve commerce challenges of tomorrow, further enhance their own product propositions and provide visionary solutions for Visa’s vast network of partners, are good examples of how we are engaging this new community.
Is Egypt creating the right environment for a digital payments culture? And what is Visa’s role in shaping the future of tomorrow’s payments?
The Egyptian government is exerting great efforts to spread the digital payments culture. We have seen mandates to empower government employees with digital payment options, we have seen the Electronic Payments Law and we have seen moves to expand acceptance to government services. Visa’s role is to support that by making our products more accessible and relevant for more people and businesses. It’s critical that any business, especially financial institutions, maintain their customers’ trust. At Visa, we work very hard every hour of every day to earn and maintain that trust by protecting people’s financial information and maintaining a safe and secure payment network for customers all over the world.
The migration to digital payments improves the lives of individuals, supports stronger businesses and spurs economic progress and prosperity. Transformation starts with a bold government vision that balances economic growth for all citizens with consumer protection, data protection, and economic security.
Then it’s a case of assessing how digitisation can help improve communities. Digital payments have several advantages over cash. First, they are transparent so there is less leakage from the system. There are records, which helps improve things like accurate tax accounting. Disbursements can be delivered directly to bank accounts. This means that more people are able to access other important financial services. It also means that the informal economy, which works against economic growth and traps people in a cycle of poverty, is reduced.
User experience is key. People will not use anything that is harder or less efficient than the alternative. People want to pay their bills, collect their benefits, pick up a coffee, go to the movies, order groceries, and send money to their parents. If the user experience isn’t good, they won’t use it. So, we have to spend time to make digital solutions better than cash. In a place like Egypt, mobile services are also critical – so we must develop everything as mobile-first.
Another critical element is to ensure we’re helping micro and small businesses accept digital payments. These businesses are the life-blood of the economy – transacting over $6.5tn per year and interacting with more than 4.5 billion customers every day. We must ensure they are integrated into the digital economy. We certainly see a global shift toward digital payments. Digital payments exceeded cash payments for the first time in 2016. In places like the United Kingdom, cash now accounts for around 40% of all payments, down from around 62% in 2006, according to reports. In India, the government’s demonetisation programme has really accelerated digital payments.
How can Visa help in supporting the transit sector and do you have studies around that?
Today, there are more than 7.6 billion people living on this planet, with the population expected to rise to 8.6 billion by 2030, then to 9.8 billion by 2050. Where do these people currently live? More than half of them are in cities – and this trend is set to accelerate, reaching projections of 68% by 2050. (2018 UN Population Prospects)
Visa just launched a global transit study examining daily urban transportation, in collaboration with Stanford University. UN projections state that by 2050, almost three quarters (68%) of the world’s population will live in a city – and that the number of “megacities” with populations greater than 10 million people will rise from 43 today to 51 within that same period. Therefore, the role of transportation that adequately serves the current urban migration is becoming increasingly important. Visa commissioned a survey of more than 19,000 individuals from 19 countries around the world to better understand the pain points of commuters of all ages by gauging their current daily travel, frustrations, and the innovations they would like to see in the future to counter act these challenges. The findings were shared with a view of existing and near horizon innovations provided by experts at Stanford University, to better understand the technology gaps in addressing these pain points.
Visa believes that technology – particularly connected devices – has the potential to transform the world’s bustling cities of today into efficient megacities of the future. But this will require collaboration. To improve the experience of living and traveling in megacities and unlock economic growth tomorrow, partnerships must be forged between urban planners, think tanks, public authorities, automotive and technology firms, and payments providers such as Visa, to make scalable improvements to transport infrastructure in urban environments today.
Companies such as Visa have an important role to play in the future of transportation, both in helping streamline the commerce underpinning transportation, as well as acting as the ‘connective tissue’ that helps cities see the broader patterns of consumer activities. By examining the bigger picture and understanding the issues that concern citizens today, we can take action to enhance the experience of travelling and paying for travel. Together we can create smarter, better-designed cities which support the increasing demands and changing needs of citizens in the future.
The study shows a small portion of the youth (Gen Z) in Egypt use personal mode of transport for commuting and that they have some concerns with the convenience of public transport. With the growth of the start-up scene we hope to see initiatives in Egypt that will increase the efficiency of transport. The Egyptian government alongside the private sector is working on improving infrastructure by creating new roads and renovating metro lines. Infrastructure combined with new technological mechanisms that ensure quick and safe transactions means that people will spend less time, money, and energy on commuting in their everyday lives. The youth are able and keen to develop Egypt into a functional tech-savvy nation and they are the biggest demographic in the country. Progress is essential to the growth and success of the Egyptian economy. At Visa, we believe that the future success of our cities is intertwined with – and reliant on – the future of transportation and mobility.
How can mobile payments play a role in expanding the acceptance footprint in markets like Egypt and how does digital payments affect the security of business and consumers?
The penetration of mobile phones in emerging markets is growing at such a fast rate that the likelihood of consumers owning a smartphone is very high, even if they do not have a bank account. Today, individuals are always connected to their smartphones and, consuming an increasing amount of digital content and services, there is a growing tendency to use smartphones for making payments as well. In developing economies, mobile money systems are bringing digital payments to millions of people previously excluded from the financial mainstream.
On the other side, we have the retailer or the merchant. Point of sale (POS) devices are costly and require a fixed line internet and power, which is not accessible to everyone. Again, the mobile is a game changer. With a mobile phone and a USSD number, or a QR code – that little black and white box you now see on many products that can be read by your smartphone camera, suddenly a merchant can accept a payment via a mobile phone – allowing funds to go straight to their bank accounts safely, conveniently, and instantly.
Mobile payments can prove effective in bill payments, small amount transactions, and can significantly decrease the investments merchants put into traditional POS.
In Egypt, mobile payments can play a big role in expanding the digital acceptance footprint as it would empower significant portions of the population and enable them to transact digitally. Our work with Egypt Post on the infrastructure enablement and readying its staff, through workshops and seminars, along with issuance plans is targeting underserved segments in rural areas. This comes after launching mobile payment with key clients in the market.
What is Visa doing to help merchants navigate the world of digital payments?
More than 180 million micro and small merchants operate across the developing world. While individually these businesses are small, their influence within the global economy is significant: They transact over $6.5tn per year and interact with more than 4.5 billion customers every day. Because these merchants typically have thin margins, low-income customers, and small transaction values, and operate in cash-based ecosystems, little has been done to integrate them into the cashless economy.
The digital payments revolution presents tremendous opportunity for merchants to build stronger, more profitable relationships with their customers. By adopting digital acceptance models and solutions, merchants can benefit from increased sales, higher conversion, and authorisation approval rates. They can also benefit from lower costs from reduced fraud, streamlined integration, and access to innovations at lower incremental cost. Visa is working hard to get retailers access to tools and technologies that enable secure and convenient payment experiences, regardless of the form factor.
In the UK for example, working with Pizza Express, Visa has delivered the ability to pay at the table. The waiter-less experience starts from the moment a customer is seated in the restaurant. When an order is taken, customers are given a table number and when ready to leave, they simply open the app, pop in their table number, view the bill, pay and leave – and all without involving the waiting staff.
We are entering the era of instant commerce – which will soon become cognitive commerce. Systems, from climate sensors to social media networks, are always on. They not only talk and network with one another but also create 2.5 quintillion bytes of data every day. That means 90% of the world’s data was created in the last two years alone and, thanks to advances in artificial intelligence (AI) and machine learning, can be analysed better than ever before. Advances in AI, machine learning, and cloud technologies are beginning to enable experiences that can anticipate and automatically fulfil consumers’ wants. This could have a profound impact on how commerce for everyday spend is completed.
Visa is a sponsor of the Total African Cup of Nations; how do you see the sponsorship especially that it will be one of your main activities in 2019?
We, at Visa, are very excited about being part of it as the exclusive payment partner. We are working with our partners and all stakeholders to make it a memorable experience for football fans and provide unmatched experiences to clients, cardholders, and partners.
The sponsorship partnership will make Visa the exclusive payment services provider at all venues during the African Cup of Nations tournaments in 2019 and 2021 and will be the preferred payment option for tickets bought both in-person and online. In addition, Visa is the official partner of the player escort programme, giving over 1,100 children the opportunity to lead their football heroes out at the matches.
The Africa Cup of Nations tournament is the third biggest football tournament in the world and there is no other pan African sponsorship property that drives the audience and reach that it does in this continent. This 4-year partnership will give Visa the opportunity to showcase the latest in payment innovation and make a demonstrable impact on the fan experience and local merchant environment in the coming years to continue our work given the global and local love of this sport.