What was your vision when you launched Geidea in 2008?
Since 2008, it has been clear to me that consumers in Saudi Arabia needed more seamless and efficient ways to spend their money. At the same time, merchants required better access to payment solutions in order to grow their business – there was a clear gap between their expectations and the solutions that were being offered in the market at that time.
I didn’t want to waste any time, and I knew that I wanted to do make an impact as an entrepreneur rather than join a corporate.
When I started Geidea, my main vision was to reshape the payments industry in the whole MENA region. I could sense that the digital revolution would be all-encompassing, and that fintech innovations would transform business and bring incredible opportunities for SMEs and aspiring entrepreneurs. Of course, with a rise in digital payment solutions, I also saw the huge benefits for consumers through a cashless society.
For me, solving problems required innovative ideas – and that’s where the name Geidea came from; a genius idea. We have built a suite of solutions that makes payments more accessible, affordable and intuitive for businesses of all sizes. In parallel to this, we are focused on making the customer experience seamless and significantly improved, leveraging the digital, high-tech ecosystem through open-source software, cloud computing and other trends.
Can you describe Geidea’s growth journey?
The Geidea journey in Saudi Arabia is certainly unique. After launching our first product in 2011 – a loyalty programme solution – it only took four years for us to become the country’s largest fintech provider by market share in the country. While we are incredibly proud of that rapid growth, we are aware that it comes with a particular responsibility on us as digital innovators and developers to create the right kind of solutions which will drive the kingdom’s future as a cashless society.
Not only were we one of the first companies to obtain a fintech licence from the Saudi Central Bank (SAMA) in 2021, but we were the only non-bank institution in the kingdom to be granted an acquiring licence from SAMA. Throughout our journey – from startup to the country’s largest fintech company – we have worked incredibly hard to meet the industry’s needs by bringing new digital payment solutions to the market.
Geidea was the first fintech in the region to develop an app-based contactless Phone-PoS solution, empowering SMEs with a simple and intuitive way to process customer payments. This particular technology is vital as it allows merchants to accept payments quickly and securely on their Android mobile phones without the need for a separate payment terminal or connection.
That specific solution encompasses the traditional PoS terminal features, including acceptance of payments from contactless cards, mobile wallets, and wearable devices. We wanted to create a completely holistic ecosystem within one application, so all transactions are settled directly, and funds are automatically transferred into their existing bank account.
From those early days in 2008, when our innovative ideas were at an embryonic stage, we are now operating around 700,000 payment terminals across the region with about 150 million merchants, including regional and international brands, SMEs and e-commerce players.
That vast contribution has earned Geidea widespread recognition, including being named by International Finance Magazine as the Fastest Growing Payments Solutions Provider in Saudi Arabia for 2021. We were also named Best SME Payment Solutions Provider GCC in 2021 by CFI, and we received the Best Payment Gateway Award in 2021 by Global Business Outlook.
What notable partnerships and products have Geidea rolled out over the last few years?
Collaboration and co-creation is fundamental to our success. From day one, I recognised that Geidea had an opportunity to look at things differently and reshape the way customers, banks and merchants interact. The technologies we have invested in are game-changing, and that is why Geidea has always had very close alignment, not only with the investor community, but with regulators and the business ecosystem as a whole.
Strategic partnerships have played – and will continue to play – an exciting role in our development as a business. A great example is our recent partnership deal with Magnati, formerly part of First Abu Dhabi Bank (FAB), which has provided us with an in-road to the UAE market where we intend to roll out a full suite of value-added services and payment solutions to companies across the country.
We have also partnered with institutions in Egypt – for example providing Banque Misr with our SoftPOS payment solutions. Looking ahead, we hope to extend our partnerships even further to provide more services where Geidea is based – across KSA, UAE and Egypt.
Some of our recent and exciting new partnerships include channels by STC, which is the exclusive sales and distribution arm of STC Group and the National Computer Systems Company (NATCOM), a leading IT infrastructure and software businesses solution provider in Saudi Arabia. The STC partnership allows us to provide an integrated suite of solutions to the company and their network of retailers, which enables them to seamlessly manage their stores, accept payments and resell top-ups and vouchers.
Additionally, the partnership with NATCOM expands the reach of our SoftPos solution, empowering it to provide its customers with a payment experience that is transformational and innovative. We have also entered into strategic partnerships with global payment institutions. Last year, following the launch of Phone PoS, we signed collaboration agreements with Mastercard, Visa and major Saudi player SABB Bank. These are vital as we scale up our technologies across the region.
Geidea recently expanded to Dubai and Egypt. Can you tell us more about the company’s strategic priorities going forward?
We are proud to have our roots in Saudi Arabia and continue to focus strongly on supporting the kingdom’s Vision 2030. However, we believe market expansion is also important and we see multiple opportunities to serve other countries with our solutions, as well as add more expertise across the business.
Egypt marked the first country for our expansion in 2021 and we have already embarked on several partnerships with Banque Misr and The National Bank of Egypt on various PoS and Soft-PoS solutions. Our growth has continued and, just this year, we partnered with Magnati, the former payments arm of FAB, to provide solutions to companies in the UAE.
The payments landscape has changed dramatically within the Middle East. What do you believe is the biggest trend coming over the next three-to-five years?
I believe there are many innovation accelerators that will really extend the applications of payments in the digital ecosystem across the Middle East and globally. Technologies such as the cloud, big data, artificial intelligence, machine learning and virtual reality, as well as the Internet of Things, will open up new areas for payments – and thus the fintech sector.
Additionally, new value chains and digital assets, such as crypto, NFTs and other digital currencies, are ensuring that payments become increasingly digital. We have witnessed an exponential shift in shopping behaviours, fuelled by the coronavirus pandemic, with e-commerce sales expected to grow to $50bn in the MENA region in 2022, according to a new survey.
We are monitoring this closely and are constantly looking at ways in which we can enhance the payment experience for merchants and consumers alike. Going forward, it will also be important to maintain a strong cybersecurity network to build trust among consumers – this is essential to build trust amongst consumers.
According to a PwC survey, 58 percent of Middle East organisations predicted a rise in cyber spending in 2022, compared to 43 percent last year. This is imperative, not only to secure our systems, but to instil confidence among our consumers.
Finally, I believe that investment in the entire fintech sector is key and this needs to come not just from the private sector, but from government investment funds, which will result in a healthy and diverse ecosystem of capital and interest.
Saudi Arabia is making a lot of progress towards becoming a fintech hub. How does Geidea see its role in this ecosystem?
Our role is critical. Saudi has a cashless transaction target of 70 percent by 2030, and we look forward to building on the progress we have made so far. We have worked to actively diversify across the transaction value chain through PoS licence expansion, aiming for an Electronic Money Institution licence and a host of value-added SaaS- and LaaS-based solutions.
Through new partnerships, we are working to transform how businesses access financing. In November 2021, we partnered with the financing company Alamthal to make accessing loans and processing repayments easier, with less hassle and less stress. This partnership allows us to expand our role within the fintech ecosystem by providing a secure, trusted solution that empowers businesses with access, safety and flexibility. This is crucial in helping growing companies to expand and scale.
More recently, in January 2022, we developed our strategy for simplifying access to capital and loan financing for businesses by collaborating with the debt crowdfunding platform, Forus.
The partnership enables SMEs to pay back their loan amounts directly through point-of-sale terminals by automatically setting aside a percentage or amount of monthly revenue towards their loan obligations.
It’s actually a really creative and exciting way for us to replace the need to make cash or physical payments by automating the entire process. That is all part of our drive to democratising access to capital, because financing has often been a barrier to growth for a lot of entrepreneurs in Saudi Arabia.
What are the challenges and obstacles that organisations and companies face when adopting seamless fintech solutions?
One of the major obstacles for most fintechs is a barrier to entry within the market. Even though regulators are taking numerous steps to improve the procedure of licence and operational approvals in the sector, there remains a lot of bureaucracy to overcome. It is important, therefore, for all regional governments to simplify these processes and make it easier to procure licences.
Fortunately, most regional governments, get it when it comes to the importance of building the digital economy, and are actively supporting the development of the fintech industry in the region through a strong ecosystem – the creation of regulatory sandboxes that are aimed at introducing regulations faster, facilitating seamless licence approvals and more is a perfect example.
Fintechs also face heavy competition within the sector, as well as a war for talent as employees with new-age digital skills are increasingly valued. Another challenge is related to ongoing advancements in technology and updating legacy systems. Some fintech solutions are not compatible with older systems, which can lead to disruptions or cost implications for those looking to adopt them.
From Geidea’s perspective, we see our role as enabling new companies, banks and fintechs to get access to, or help provide innovative payment solutions, as well as reducing costs in the business.
Are digital payments considered an important aspect of financial technology solutions? And what is the demand growth rate for payments solutions in 2022?
According to a recent report by the World Bank, fully digitalising the MENA economy could lead to a rise in GDP per capita of at least 46 percent over 30 years, or in dollar terms a long-term gain of at least $1.6 trillion.
Financial benefits aside, the biggest benefit of a cashless society is undoubtedly its ability to improve transparency among all stakeholders – merchants, consumers, governments, financial institutions and regulators. The digital economy will improve the transparency in collecting revenues, especially as regional governments use VAT systems and collect revenues to invest back into society and build infrastructure. It can also help to mitigate crime and issues such as fraud.
Then there is the convenience factor. Today’s customers want zero-touch payment solutions; they want a simple, frictionless and secure experience.
Ultimately, current trends are pushing all parties in the direction of removing single purpose payment instruments and checkout-type interactions from the transaction process wherever doing so is feasible.
At Geidea, for example, this requires automating our back-end systems, and reducing the touch points that customers interact with, to enable new payment methods to be added to the merchant’s suite of products. We are seeing a demand for this coming into all Middle Eastern markets, and even countries that were previously slightly off the curve.