By Raghda Helal
How do you evaluate the electronic payment system in Egypt?
Of the approximately 85 million people in Egypt today, the World Bank estimates that a mere 5% have debit cards and 1% have credit cards. Even more surprisingly, despite that Egypt is the recipient of highest remittances in the Middle East and sixth highest in the world, only 1 % of Egyptian recipients have bank accounts according to the World Bank.
Through financial inclusion, we can create a world beyond cash and extend the benefits of electronic payments to people who have been excluded from formal financial services until now. And economies will benefit in turn. At MasterCard we believe that everyone should have a chance to participate in the global economy and have access to basic financial tools. Modern day payment technology can play a pivotal role in bringing this about.
What are MasterCard’s latest moves to encourage electronic payments?
MasterCard had recently unveiled findings of its “Road to Inclusion” report at a Financial Inclusion conference that was sponsored by Fawry, International Finance Corporation (IFC) and MasterCard. The Road to Inclusion report looks at the financially excluded and under-served in six culturally diverse markets across APMEA – Egypt, India, Indonesia, Vietnam, Philippines, and Nigeria. It was commissioned by MasterCard to better understand what financial exclusion or under-service means to the millions of people within this group. This is in order to better provide services that engage this marginalised audience and help them to reap the benefits of financial inclusion.
In 2013, under the aegis of the Central Bank of Egypt, MasterCard teamed up with Egyptian Banks Company (EBC) to introduce the country’s Mobile Payment Gateway to enable financial inclusion through the power of mobile phones. With the launch of the mobile payment gateway and the ensuing mobile wallet solutions, more than 80 million mobile users in Egypt now have access to financial services that allow them to make bill payments, transfer funds and also withdraw cash.
Tell us more about MasterCard Prepaid Programme for Government Payroll & Pension Payments
In Egypt, we have worked with key government entities and financial institutions to introduce innovative programmes that are gradually bringing the unbanked under the ambit of formal financial services. In November 2010, for example, we collaborated with Egypt’s Ministry of Finance to launch the MasterCard Prepaid Programme for Government Payroll & Pension Payments that covers 10 million government employees.
During the 2011 uprising, many parts of Egypt came to a grinding halt and many found it difficult to access banks. But, I am very proud to say that during that period, MasterCard cardholders were the only public sector employees who received their pay on time, on their MasterCard payment cards.
Today, almost 2 million of these cards are in force in Egypt and this is the largest Public Sector payroll programme in the Asia Pacific Middle East and Africa (APMEA) region.
Tell us more about the Mobile Payment Gateway
MasterCard Payment Gateway is a breakthrough evolution in payment systems that connect issuers, buyers and their suppliers faster and more efficiently than ever before. It is a flexible enterprise-wide payment processing platform for routing commercial payments between buyers, suppliers and their financial institutions. This innovative offering gives companies a streamlined total payables solution designed to increase productivity and profits with enhanced security, while simplifying the entire payments process.
The MasterCard Payment Gateway can manage multiple payment types, including card and electronic funds transfer (EFT) and is part of MasterCard’s continuing effort to improve the payments process for businesses of all sizes, and revolutionise an industry traditionally dominated by check payments and wire transfers.
Were there any challenges you have faced before launching the system?
With nearly 80 million mobile phone subscribers in Egypt, Mobile Money solutions emerged as the suitable option which could rapidly open doors for Egyptian people from all walks of life. In Egypt, however the challenge was to develop a cost efficient system that would provide secure money transfer and management for mobile subscribers. Besides that two other operational challenges emerged. The first was to enable mobile money consumers and merchants to transact with consumers and merchants of traditional payment systems, while second was to enable consumers and merchants of different proprietary mobile money systems to transact with each other.
In response to this challenge, we partnered with the Egyptian Banks Company and the Central Bank to launch the country’s first Mobile Payment Gateway.
What was the feedback of the launch?
Soon after the introduction of the Mobile Payment Gateway in Egypt, ‘Flous’ (money in Arabic) mobile wallet was launched in collaboration with Etisalat and National Bank of Egypt (NBE) bringing Etisalat Egypt’s subscriber base safe and convenient payment services through the power of their mobile phones. Flous uses the Etisalat mobile network and can be deployed on any mobile phone.
The first phase of this programme allows subscribers to transfer money to anyone participating in the service using their mobile phones, and to load cash on their phones or take out cash through Etisalat branches and NBE branches across Egypt. The second phase of the programme will allow subscribers to pay their bills through their mobile phones, top up their mobile prepaid lines, and pay for goods and services at several merchant locations in Egypt, in addition to using it for e-commerce payments globally.
This is the first Arabic mobile payment wallet in the Arab world. It means that anybody with a mobile phone is now able to transfer money to anybody else who uses the service – simply with a few taps of the mobile phone. Not a smart phone…any phone. There is absolutely no need to walk in to a bank or money exchange.
Immediately after, in September 2013, NBE launched ‘Phone Cash’ Mobile Service in collaboration with Fawry, MasterCard and EBC. The Phone Cash service operates independently from the network of any specific mobile company, making NBE the first bank in Egypt and wider Middle East to offer this service.
This mobile payment wallet is available to banked and unbanked individuals across Egypt, who can use this service to send money, pay phone bills, load credit to prepaid phones, make donations and even reserve airline tickets.
What is the Remittance Programme that you offer?
Remittances are a key source of income for a large number of families in Egypt and this is another segment that offers huge potential for financial inclusion; hence a key focus for MasterCard.
Despite that Egypt receives one of the highest amounts of remittances in the world, only 1% of Egyptian recipients have bank accounts. This challenge is however being converted into an opportunity with prepaid payment solutions.
In Egypt, we have collaborated with Banque Misr to launch the Hewalty MasterCard Prepaid Card that enables unbanked consumers in Egypt to instantly receive funds from their family and friends living in the GCC.
With this initiative, the unbanked populace now has access to a formal financial tool that allows them to better manage their funds in a secure manner. And since this is a MasterCard Prepaid Card, the cardholder will enjoy the benefits of global acceptance, round the clock access to funds and even the option to securely shop online. This is the power of innovative payment solutions and we are only getting started in Egypt.
Tell us more about the Cashless Campaign.
The benefits of electronic payments are widespread: more convenience for consumers, better efficiencies for governments, higher productivity for businesses, and greater financial inclusion for the society as a whole. MasterCard has recently launched a unique ‘Cashless Campaign’ that aims to spur the adoption of electronic payment solutions in Egypt. It has been launched in collaboration with five prominent banks namely the National Bank of Egypt, The United Bank, Emirates NBD, Housing and Development Bank and Commercial International Bank.
Our objective to launch the ‘Cashless Campaign’ with key financial institutions in Egypt is to raise further awareness about these benefits amongst consumers in a rewarding way and, as a result, encourage the adoption and usage of innovative payment solutions. The new ‘Cashless Campaign’ is yet another initiative by MasterCard that supports the Central Bank of Egypt’s vision to create a financially inclusive society.
How can users benefit from this campaign?
With ‘Cashless Campaign’, MasterCard debit cardholders from participating banks will stand a chance to win gold every day for 92 days; winners will be chosen daily by each bank. Cardholders simply need to make a purchase of any amount using their MasterCard debit card to be eligible. By the end of this campaign, 460 MasterCard cardholders from across the country would each receive 21 grams of solid gold in the form of a debit card.
Why did MasterCard collaborate with Fawry?
We recognised the opportunity to collaborate with Fawry to introduce MasterCard Bill Payment service in Egypt. Acceptance is a critical pillar of the MasterCard payment model and we are committed to expanding points of acceptance for the convenience of local MasterCard cardholders through multiple channels
MasterCard card holders can benefit from Fawry’s bill payment services through ATMs, at convenience stores, or on Fawry’s website. The services are also available at numerous retail outlets for those who do not have access to banks and consumers less familiar with computers or ATMs. The infrastructure will increase acceptance by acquiring growing network of acceptance points at small grocery, stationery and pharmacy stores, which are equipped with point-of-sale machines to facilitate payments.
Fawry’s service has the potential to revolutionize the payment industry in Egypt. This innovation not only simplifies consumers’ lives, but allows more merchants to become a part of the electronic payments cycle, giving them the opportunity to safely conduct transactions and appeal to consumers who prefer not using cash.