A buy now pay later has been going for quite some time across much of the world, particularly in North America, Europe and Asia. In the Middle East region, specifically in the Arabian Gulf region, there have been significant home-grown innovations to also provide solutions to consumers. Particularly now with COVID-19, giving as much options to consumers is important more so than ever. In the Gulf Cooperation Council (GCC) region, we sit down with Hosam Arab, Founder and CEO of Tabby, who offers his insight.
Hosam Arab has deep ecommerce experience and is a second generation entrepreneur. A Harvard Business School graduate, he co-founded Namshi.com and grew it into one of the largest exists in the region. Relying on his in-depth e-commerce experience, Hosam is now busy solving another pressing problem for customers and businesses in the region – weeding out cash on delivery and unlocking flexible interest-free financing for the masses.
For our global audience, can you explain what the digital and fintech landscape across the globe currently looks like (focusing on payments)
The term fintech covers a lot of industries that may require a dedicated segment each. So, let me narrow this down to payments. The rails that process our payments today, were established decades ago and have evolved very little since their inception. With the explosion of e-commerce transactions, customer needs evolved faster than the incumbents kept up. This meant that newer ways to pay started to emerge. Digital wallets came into the fray a few years ago, and continue to gain traction across the globe. The same goes for alternative payment methods (Paypal, Apple Pay, etc). Each addressed a different need. Some solved for friction, some solved for a lack of trust and others for security.
What’s been interesting to see, is the evolution of credit as a form of payment, specifically its provision at the point of sale. Klarna, Afterpay etc set off this rapid change in credit consumption and adoption, which was otherwise on its way down due to mistrust in financial systems and credit cards after the 2008 recession.
How does this alter in The GCC?
The GCC is an interesting market. Each country is different in terms of its infrastructure and digital adoption.
Consider the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA), two of the largest markets in the region. The UAE has high credit card penetration and easy, frictionless digital transactions. The KSA has low credit adoption, most of the transactions being done in cash, and the regulatory authorities are extremely proactive and supportive in our endeavor to change this. Cash is king across both markets, especially in e-commerce. There is a lot of potential in the market to evolve and adapt payments, in order to accommodate this massive wave of digitisation of retail that is yet to come.
Across the GCC, regulations are being passed to digitise transactions and weed out cash in order to build a digitised, transparent and high trust society.
How have you developed your subject matter expertise and helped to share it across in your home country? And with the GCC?
I make it a point to surround myself with intelligent folks, who help me become better at what I do. We’ve followed the same approach at tabby. Our team consists of some of the brightest minds across the globe, spanning e-commerce, top tier consulting, and Buy Now Pay Later as well! Our investors too, come with deep regional and/or industry knowledge and I’m humbled by their support for tabby. We’ve got some of the brightest minds from across the globe, working within our localisation framework to help solve problems for us that have already been solved in other parts of the world.
Their insights into solving business problems, combined with my experience in the digital ecosystem of this region, is a powerful combination. Replacing cash on delivery put us on this journey, and the need for credit during these difficult times continues to propel us to new highs and define our product roadmap.
What are future trends and predictions you see happening in the region? And specifically with your company?
The core trend that we’re focusing on now is replacing cash and unlocking credit for the masses. We’ve come a long way within a short span of time and are lucky to count some of the largest and most innovative retail groups in the region as our partners in this journey. Hats off to them for recognising the potential early on and moving as fast as they did.
We’re already live in two of the largest markets in the region, and the results are amazing. The next few months will see tabby penetrate deeper into both markets, launch new products, and form new partnerships that help us achieve our goals.
Any advice or recommendations you would give to other future fintech companies and entrepreneurs based in the Middle East & Africa (MEA) region?
My key piece of advice not only for fintech entrepreneurs but for entrepreneurs in general is to make sure you’re solving for real problems in the markets you’re targeting. It’s fairly straightforward to find a model that exists elsewhere and try to mimic it locally, but doing that blindly without localising the solution for the challenges of your market is bound to fail.