Mobile money is fast becoming the new buzzword for millions of un-banked, under-banked and small businesses in the UAE, turning micro-local units such as barber shops, small time eateries and supermarkets across the country as the new points for monetary transactions – for deposits, transfer and withdrawals, sector experts said.
A new set of fintechs such as Whizmo, licenced by the UAE central bank, are re-defining the financial sector by offering accessible, secure, and easy-to-use mobile money solutions to not only serve the unbanked and underserved small businesses but also offer stiff challenge to traditional financial solutions with their competitive price points and value propositions.
The suite of products and user-friendly processes offered by platforms operated by these fintechs empower users to effortlessly convert their digital assets into physical cash, guaranteeing flexibility and accessibility, industry insiders said.
“The concept of utilizing everyday businesses such as supermarkets, restaurants, barbershops, and other such local joints as points for monetary transactions – adding and withdrawing money – is novel in the UAE market,” Eric Karobia, CEO of Whizmo, told Arabian Business.
“Engaging these businesses and integrating them into our model requires a concerted effort to demonstrate the mutual benefits of our approach, thereby establishing a new paradigm for financial transactions within the community,” he said.
Though several other players, including Al Ansari Exchange and LuLu Money have been operating in the sector for some time with their mobile apps, new entrants such as Whizmo offers a comprehensive suite of products, encompassing all types of financial transactions to the technically challenged and mainstream financial sector-excluded customers with their new QR-code based technology.
New model presents opportunity to create a self-sustaining ecosystem
Karobia said their model presents a unique opportunity to create a self-sustaining ecosystem that not only serves the unbanked and underserved, but also offers competitive price points and value propositions compared to traditional financial solutions.
“What distinguishes Whizmo from others is not just our innovative approach to the three key areas – ‘Money-in’, ‘Circular Value’, and ‘Money-out’ – but also our dedication to aligning our pricing and cost strategies with the needs and expectations of our target consumers,” he said.
‘Money-in’ is the initial phase where these platforms focus on attracting funds through targeted, incentivized strategies, fuelling the platforms with the necessary capital to operate.
The concept of ‘Circular Value’ refers to how the platforms maintain and utilize the funds within their ecosystem through various services and transactions that keep the users engaged and invested in using the platforms, while ‘Money-out’ addresses the need for liquidity, allowing users to withdraw funds from the platforms.
“Our strategy is to cultivate effectual, user-friendly processes that empower users to effortlessly convert their digital assets into physical cash, guaranteeing flexibility and accessibility,” the Whizmo chief executive said.
UAE set to see a surge in QR-based mobile money transactions
Sector experts said the entry of the new set of players is expected to trigger a surge in the UAE’s mobile payments market, with expectations of a CAGR of approximately close to 13 percent over the next two to five years.
“This projected growth rate underscores the immense potential and burgeoning opportunities within the digital finance sector in the region,” an industry analyst said.
“QR codes represent a pivotal element of this growth trajectory, currently accounting for close to 53 percent of the market share in [UAE’s] mobile wallet transactions,” the analyst said.
Karobia said with an anticipated CAGR of 11.62 percent from 2023 to 2028 for QR-based transactions, it’s clear that consumer preference and trust are increasingly gravitating towards QR code technology for seamless, contactless payments.
“This trend aligns perfectly with Whizmo’s strategic focus on QR code technology as a simple, yet effective, conduit for our digital financial solutions,” he said.
Karobia also revealed that Whizmo plans on leveraging innovations and a deep understanding of market dynamics to tap into the expanding demand for mobile money solutions.
He said a significant opportunity lies in expanding the platforms’ distribution network through network partners.
Karobia said the company is also set to expand into other markets in the region, replicating its UAE template in other markets with required tweaks to align with local regulatory and other requirements.
“Whizmo aims not only to enter new markets but also to thrive within them, adapting our services to meet the diverse financial landscapes and regulatory environments encountered across the GCC and beyond,” he said.
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