StartUp Academy: Overcoming online payment challenges

Experts in e-commerce addressed scores of attendees at the latest Arabian Business StartUp Academy, helping them overcome common hurdles in online payments.

The unstoppable rise of online business has seen more and more start-ups, SMEs and entrepreneurs flock to the banners of e-and-m-commerce.

Indeed it seems unfathomable that any new business today would shun an online presence and the opportunities it brings to make transactions.

But oftentimes there has been a fly in the online ointment which has frustrated and foiled entrepreneurs and small businesses: payment gateways.

It’s an industry which is changing fast, and making great leaps forward in the region, yet some issues still exist for merchants looking for the right provider for them.

With that in mind, the July edition of the Arabian Business StartUp Academy invited two industry experts to discuss important aspects of the payment puzzle.

First on stage was Alaeddin El Majed, payments manager at HyperPay, to discuss the differences between analytics and insights.

El Majed told his audience that HyperPay is the fastest growing online payment gateway in the MENA region, featuring a range of payment process services for business selling both online and offline.

The company connects merchants to a consolidated network of global, regional and local payment methods, and currently processes payments for more than 400 merchants including MBC Group, Zain, and Al Hokair Group.

To add to its credentials, HyperPay has partnered with PAY.ON, a German payment technology provider with more than 10 years of experience which processes 1.2 million transactions per day.

Launching into his presentation, El Majed immediately sought to highlight the difference between analytics and insights.

He used a quote from basketball star Charles Barkley, that “analytics don’t work at all,” and that “it’s just some term that people who were really smart made up to try to get in the game they had no talent to be able to play.”

Conversely, he explained an insight to be “an instance of apprehending the true nature of a thing, especially through intuitive understanding”.

To express the differences between the two, and what they can mean for the future of a start-up’s online payments, El Majed took statistics from the UAE and Saudi Arabia and explained how analytics and insights can view then differently.

For example, while analytics will say that the 39 percent of the UAE’s population shop online, and 14 percent of Saudi Arabia’s do the same, insights will say that the UAE has 61 percent of untapped potential, and Saudi Arabia 86 percent.

Standing alone, the difference in approach is clear, but add in growth forecasts and that picture changes yet further.

Analytic growth forecasts are based on historical rates, while insightful forecasts will take into consideration the aforementioned untapped potential.

Another example is that of the male to female online transaction ratio in Saudi Arabia, which stands at 85:15.

Analytics would suggest that men are far out-transacting women online, but the insight would be that in many cases male relatives are making the purchase on behalf of the women, using their credit or debit card. The results, therefore, offer a different picture when insight is used rather than analytics.

El Majed explained that analytics are just statistics, and while they are important they are not always reliable. More important in the world of online payments, he suggested, was to have a partner that could deliver valuable insights.

Following a brief networking break, the Academy’s second speaker took to the stage.

Sirish Kumar, CEO of Telr, who counts among his former roles CFO of PayPal for South East Asia, co-founded the Dubai and Singapore-based payment gateway solution in 2013.

Hi presentation highlighted a number of payment issues that Telr was launched in order to address, including pain points from different stages of a start-up’s growth.

These include the cost of setting up online payment, the lengthy onboarding process, and the use of local currencies, all of which Telr has sought to improve though a series of innovations and partnerships.

One such partnership is with Amman-based Arab Bank, which was announced in June and is designed to ease the process for merchants looking to offer online transactions, as well customers buying from their websites.

Kumar said that he hoped the partnership would encourage other banks across the region to follow suit and, in doing so, help nurture and support start-ups and SMEs – the backbone of many economies throughout the Middle East and Africa.

Similarly to El Majed, Kumar explained that a payment partner should provide more than just a basic service to merchants.

He said that they should offer expertise in innovation, industry growth, technology, market knowledge, and market opportunities among other things.

These kinds of expertise can help them develop opportunities in the growing sphere of social commerce. Kumar highlighted that Facebook and Instagram are on course to become the largest platforms for merchants in years to come.

Partnerships with banks, and aiding social commerce is one way in which Telr is “changing the formula”, he explained.

Another is the development of the company’s new Store Builder facility which allows merchants to customise their own mobile-friendly website, complete with content management, order management, social media integration, data analytics, customer support, loyalty programme, and integrated Telr payment gateway.

Kumar explained that the stores are easy to set up and can be ready in just 15 minutes, eliminating yet more of the common time and cost difficulties associated with the existing processes of setting up payment gateways.

It emphasises something that Kumar was keen to address – the issue of fragmentation. Too often, he said, the different aspects of setting up a small business are fragmented and difficult to pull together – one part of which is payments.

With Telr not only providing a multi-lingual and multi-currency payment gateways, but also logistical support and funding options, Kumar believes this fragmentation is being reduced, helping to solve many problems for merchants, and allowing them to grow their businesses.

Following Kumar’s presentation, the two speakers returned to the stage to field a series of questions from the floor.

And after the microphones were finally turned off and coffee-cups drained, they continued to answer numerous questions and queries from attendees eager to gain the benefit of their knowledge and experience.

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