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Online and mobile payment growth potential in young Egyptian market - Daily News Egypt

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Online and mobile payment growth potential in young Egyptian market

Bee plans to expand online payment solutions for public sector during 2015, to reach EGP 1.6bn in online payments through company by year-end

Mohammed Abu Khadra, CEO of Bee Smart Payment Solutions (DNE Photo)
Mohammed Abu Khadra, CEO of Bee Smart Payment Solutions
(DNE Photo)

By Mohamed Alaa Eldin

Bee Smart Payment Solutions expects an increase in growth for the online payment market locally, as the company is worth EGP 6bn annually according to CEO Mohammed Abu Khadra. Abu Khadra outlined the company’s aims to undertake online payment operations worth EGP 1.6bn throughout 2014, and has plans to expand its outlets to 22,000 by year-end.

The company, according to Abu Khadra, is planning to expand services offered to citizens through government agencies like electricity bill and university and school payment, while they also look toward expanding abroad into two new markets in the Middle East and Africa.

How do you think that economic conditions in the country have affected the information technology sector?

Economic conditions following the 25 January Revolution were scary and did not encourage investment due to a lack of stability alongside the deterioration of the security situation. After the passage of four years, the situation has begun to stabilise, which is a positive indicator for investment conditions in the country. A committee has also been formed to review legislation and laws pertaining to investment, and the unified investment law will represent a crucial positive step for investors who have suffered from problems for long periods of time due to inconsistent and overlapping laws.

Likewise, tendering mega projects of various kinds will help boost the communications and information technology sector indirectly. For example, the first phase of Suez Canal excavation was followed by tenders for various technology services, like transferring money via mobile phone and paying bills, services which Bee provides exclusively in the region.

What is your vision for the online payment market in the near future?

The online payment market is growing rapidly at present and these growth rates will persist in light of the sector being relatively new locally; it is no more than five years old. The Egyptian consumer, across various age and social groups, has begun to utilise and adopt these services as a technological solution for paying utilities bills.

Does your company focus on services provided to individual customers or government institutions?

Bee strives to offer integrated services to all its customers, and the services offered to individuals are integrated with services offered to the public sector. This mainly consists of services citizens use as consumers to pay bills and financial dues to the public sector and private sector companies.

What is the extent to which Egypt has entered into the online payment market compared to the other countries of the region?

Compared to other countries in the region, and especially those of the Gulf, Egypt is late and considered nascent, although the delay is related to a delay in the banking system on the local level. In Saudi Arabia, for example, there are several online payment companies in existence although their services are not used due the spread of a culture of utilising financial mobile phone applications for banks.

At the same time, locally, the online payment system is growing at a good rate and holds many investment opportunities, although the banks must integrate with the services offered by online payment companies while simultaneously developing their own institutions to keep up with technological development.

Various government agencies are currently noticeably striving toward adopting technological tools, especially that of the online payment sector, which points to further future growth.

What is your company planning in terms of services offered to government agencies?

We must divide the public sector into two parts: first, services offered to citizens that do not strive to achieve a profit, and services offered to subsidiary companies of the public sector like Misr Insurance and EgyptAir. We offer those companies a commission service which allows them to attain profits.

As for the section pertaining to citizens, the main goal is not to achieve a profit as much as to facilitate processes for citizens, like paying university, school, or utilities bills. The company is planning to provide online payment solutions for the government’s online portal to pay traffic fines as well as civil registration dues for national ID cards and birth certificates. The company contacted the communications ministry more than once to activate the services offered on the online government portal and to discuss Bee’s facilitating payment solutions for those services, but at present, the portal only offers payment through credit card, which only 1% of Egyptians, or 4 million citizens, have.

Bee offers payment solutions through its own pre-paid cards, which eases the process of citizens obtaining services without using a credit card in an easy and simply way.

Are there any new contracts with the public sector?

Bee is currently negotiating with a number of public sector companies, including companies owned by government agencies and service organisations, and we are waiting to arrive at an agreement before the end of 2014.

As for universities, we offer our services to the Faculties of Science and Commerce at Cairo University in addition to all departments of Ain Shams University. We have offered these same services to Suez Canal, Fayoum, Beni Suef, Mansoura, and South Valley universities, meaning that Bee provides online payment services to six universities.

We have plans to expand our services to schools and private universities, and we hope for our services to become the medium for payment processes.

What are you plans regarding Bee’s self-payment machines?

We are currently in the experimental phase, testing out the machines’ performance. We placed the machines in the commercial centre at City Stars as well as all Mobinil branches. We expect to spread the machines to universities, public places, and train stations during 2015.

How many outlets does your company have?

At present, we have 20,000 outlets offering Bee services and we plan to increase this number to 22,000 before the end of December.

What are Bee’s regional service expansion plans?

We are orienting ourselves in two directions: one, the countries of the Middle East, one nation of which is currently being studied, and two, toward the continent of Africa, where more than one market is being studied for possible expansion into one nation there over the coming year.

What is your evaluation of the size of the online payment market in Egypt?

Bee’s evaluations of the size of Egypt’s online payment market is up to EGP 6bn annually, while total online payments that were undertaken through the company’s network during 2013 was close to EGP 1bn. The company hopes for its online payment transactions to reach a value of EGP 1.6bn in 2014.

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