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Zbooni founders Ramy Assaf and Ashraf Atia have used their heads to develop an idea that started by helping a hat business to prosper

Entrepreneurs of the Week: Zbooni founders Ramy Assaf and Ashraf Atia

Ashraf Atia, chief commercial officer (L) and Ramy Assaf, co-founder and CEO of Zbooni.

Launched in September last year by entrepreneurs Ramy Assaf and Ashraf Atia, home-grown UAE payment app, Zbooni, has 25,000 businesses transacting millions every month.

The app is designed to allow merchants, particularly SMEs, to easily conduct transactions with customers via preferred social media  and chat services, such as WhatsApp, Facebook and Instagram.

The company, which is backed by regional and international organisations, including Chalhoub Group, Middle East Venture Partners and B&Y Venture Capital, was one of only eight from across the world to take part in a six-month incubator programme at Facebook.

How was the company founded?

Ramy Assaf: The company started as an idea in 2016. The idea was that business had sort of shifted and was presenting itself on a new medium which was platforms like Whatsapp and Instagram. My wife wanted to start her own business. She wanted to sell hats. I was thinking how I would support her on this, with an e-commerce website.

She was like, ‘no dude, it’s going to be on Instagram and if people want to order, they can WhatsApp me’. I thought this was a bit goofy.

But she started that business and it started growing. After a few weeks she was selling hats and it was five hats a week, ten hats a week and up to 100 a month. The joke was on me because my living room had turned into some sort of a hat storage distribution centre.

It became evident that there was this new channel where businesses and consumers were connecting and that the actual sales had moved into that realm.

But as a business she had no tools at her disposal to capture payment from that customer or assign for delivery like you would normally have through e-commerce. It was like this back-end-less version of e-commerce. We got started to build a solution for this.

What is the business model and pricing strategy?

Assaf: We decided to start building wide so we built a system that could manage everything from how a merchant can accept payment to have the dispatch for delivery, to have the order management, the CRM system. It was just a number of features you would find for an e-commerce platform and we had tailored it so it would work with messaging-based inputs.

After about two years we had nailed the product that we had wanted to offer because it became evident that what businesses needed most was a lightweight tool in order to capture payment from their customers through messaging. We help the merchant to build the cart for the customer and send it to them in the mode they’re interacting with them, be it WhatsApp, Instagram, Facebook, whatever.

We’re seeing Instagram be the store front, the Harvey Nichols, making it look all nice and you want to go in. Instagram is that store front.  There’s no monthly fee, no subscription. We take a transaction fee of 3.5 percent.

How is this helping the SME market?

Ashraf Atia: Paying by credit or debit card may sound pretty rudimentary but actually in this part of the world the SMEs are still underserved. Just for me as a small business to accept these kind of payments, I would need to apply for approval from the bank, get a merchant ID, associate it with a website or my POS. The whole process takes from four to six months.

Banks aren’t opening bank accounts for virtual companies. They’re fully licensed and they want to open a business bank account, but they don’t have trade licenses so they can’t. And it’s the same if you hot desk.

It’s a conundrum, how you’re going to enable the SME market when the banking requirements are getting more and more difficult?

With us, if you want to set up online and start accepting credit or debit cards, you can do that within a matter of minutes.

Customers use our existing ID and trading license. What we’ve done is artificially given that experience to the SME market here. There’s no easier way for them to start accepting credit cards.

Are there any issues over data protection and privacy for users of the app?

Assaf: We do have a risk in what we’re doing, but that’s our risk and we have to manage it very carefully.

So we go through a great deal of scrutiny with our merchants to make sure they’re behaving properly. It involves certain pattern recognition in the way these transactions look like. Not selling things they shouldn’t. Making sure transactions don’t show fraudulent characteristics.

What is the future of cash-on-delivery?

Atia: I think it’s dying. It’s eroding for sure. It’s a nuisance and what we’ve learned from the delivery companies, it’s a misnomer. It’s not that the customer wants to pay cash, it’s that the customer wants to pay when they know the product or service has been delivered.

The idea behind cash-on-delivery is that consumers feel that they have some level of control, some level of protection over the process. I don’t know you, I haven’t seen you, but here’s my credit card number, just charge me. That’s new here, people aren’t fully comfortable with it.

Payment-on-delivery is like, come to my house, show me the thing and then I’ll pay. We think cash-on-delivery is going to go away. Payment-on-delivery is going to stick around, but we see its market share getting smaller as people get more comfortable.

What advice would you give anyone looking to launch a start-up?

Atia: Make sure you are building a product that has a very strong market fit. When we rolled this out in September last year, we looked at all these features and agreed that we couldn’t be all things to all people, a Swiss army knife that does things ok. We want to be the big serrated butcher’s knife that you can attack your steak with. We do one thing, but we do it very well.

That product market fit for us was SME payments. Strip down the product, focus it, this is what it does, it doesn’t do 50 other things. Once we got that and merchants understood what the value proposition was, that was when we started to see real uptake.

What are the plans for the future?

Assaf: Last September we did AED20,000 (worth of transactions), this September we did close to AED2.1m. The rate of growth is actually increasing. Next year at this time we think another 10x (AED21m).

We want to open in Egypt, Oman and Kuwait. There is opportunity here in this region and in emerging markets.

So let’s think about South Africa, let’s think about the sub-continent, about South America. There’s a lot of the same kind of cultural dependencies. If we can get it right here, we’d love to be the merchant payment platform for emerging markets.

Karanveer Singh, founder of The WiFi Guys: “One of the biggest struggles we had was that everybody wanted to pay by card. We wanted to find a way that we could accept card payments on the move.

Our team is always on the go, they go from project to project, and they can’t keep charging a card machine. We wanted a solution that was purely online and one that our customers would trust. That’s where Zbooni came in – it was exactly what we needed.”

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