MoneyHash secures $4.5 million funding for its payment platform for merchants in the Middle East and North Africa region.
MoneyHash, a payment orchestration platform in the Middle East and Africa, has secured a $4.5 million seed round co-led by COTU Ventures and Sukna Ventures.
The Complex Landscape of Payments in the Middle East and Africa (MEA) Region
🌍 The MEA region is a vibrant and diverse landscape when it comes to payment methods and providers. Each country has its own unique set of challenges, with evolving regulations and customer preferences adding to the complexity. 💸
⚡ The COVID-19 pandemic has accelerated the adoption of digital payments in the region. However, infrastructure development still lags behind, leading to higher payment failure rates and fraud. In fact, payment failure rates in the MEA region are three times higher than the global average, while fraud rates and cart abandonment exceed those of other regions by more than 20%. 😱
🚀 To tackle these challenges, payment orchestration platforms like MoneyHash are stepping in to streamline the payment processes for merchants. MoneyHash, an Egyptian fintech startup, has recently raised $4.5 million in seed investment to further invest in its technology and expand its reach across the region. This comes two years after securing $3.5 million in pre-seed funding. 💰
💪 According to Nader Abdelrazik, co-founder and CEO of MoneyHash, 10% of all payments processed in the MEA region are already digital. This puts MoneyHash in a unique position to capitalize on the inevitable growth phase the region will experience over the next decade. However, navigating this burgeoning payments market requires patience and a commitment to continuous learning. 📈
Challenges Faced by Merchants
🤔 As merchants and companies launch their platforms, they often start by collaborating with one or two payment processing providers. But as their operations grow and expand into multiple regions, they need to onboard additional payment providers to meet their evolving needs. This integration process presents significant challenges. There are operational inefficiencies, technical complexities, and differences in payment methods and currencies across different countries in Africa and the Middle East. 🗺️
🔧 MoneyHash’s product offers a unified API to integrate pay-in and pay-out rails, a fully customizable checkout experience, transaction routing capabilities, and a centralized transaction reporting hub. They also provide tools for virtual wallets, subscription management, and payment links. Other players in the payment orchestration space include Revio, Stitch, Credrails, and Recital. 💼
💔 According to Abdelrazik, payment failure rates across the region can vary significantly, and relying solely on averages can be deceptive. While the typical figures show that 3 out of 10 payments fail on average, the actual numbers differ widely among businesses. Some may experience as low as 1 out of 10 failures, while others may have as high as 5 or 6 out of 10. This doesn’t even include customers who abandon the checkout process before making a payment. Many of MoneyHash’s customers are not aware that the complexities they face in payments can be addressed and fixed. 😰
Collaboration and Future-Proofing
🚀 As merchants expand rapidly, their partner payment service providers (PSPs) often struggle to keep up with the speed of growth due to regulations and other limitations. MoneyHash has intensified its collaboration with PSPs, particularly those catering to enterprises and prioritizing customer requirements. The fintech’s extensive network of integrations, all executed in-house, reassures businesses that they are working with a team that understands the market and can navigate difficult questions in payments. 💪
🌟 In 2022, MoneyHash launched its enterprise suite, targeting large enterprises. Through various partnerships, including with payment gateways and processors like Checkout, Stripe, Ayden, Amazon Pay, Tap, and ValU, they have tripled their revenue and increased their processing volume by a staggering 3,000%. MoneyHash currently has 50 active paying customers, and their payment orchestration platform levies a combination of SaaS and transaction fees, starting at $500 + 0.4%. Larger enterprises benefit from lower transaction fees due to higher volume. 💼
Investment and the Future of Digital Payments
💰 MoneyHash’s recent seed round was co-led by COTU Ventures and Sukna Ventures, with participation from RZM Investment, Dubai Future District Fund, VentureFriends, Tom Preston-Werner (the founder of GitHub and an early Stripe investor), as well as other strategic investors and operators. The investment speaks to the belief that the full potential of digital payments in the MEA region has yet to be realized, and MoneyHash’s platform can play a crucial role in catalyzing digital payment growth. This will enable both global and local merchants to tap into new revenue streams. 💡
💬 In conclusion, the payment landscape in the Middle East and Africa region is complex and challenging. However, fintech companies like MoneyHash are paving the way for more efficient and secure payments, offering valuable solutions to merchants. As the region continues to embrace digital payments, it’s crucial for merchants to collaborate with experienced payment service providers and stay up-to-date with the latest trends and technologies. With patience, continuous learning, and the right payment orchestration platform, businesses can successfully navigate the evolving payments market and unlock new opportunities. 🌈
Q&A
Q: What are the main challenges that merchants face in the MEA region when it comes to payments?
A: Merchants in the MEA region face several challenges when it comes to payments. One of the main challenges is the high payment failure rates, which are three times higher than the global average. Additionally, fraud rates and cart abandonment are also higher in the MEA region compared to other regions. Moreover, the fragmented payment landscape, evolving regulations, and diverse customer preferences make it difficult for merchants to streamline their payment processes and provide a seamless checkout experience. These challenges are amplified by variations in payment methods, currencies, and the isolation between countries in Africa and the Middle East.
Q: How can payment orchestration platforms like MoneyHash help merchants overcome these challenges?
A: Payment orchestration platforms like MoneyHash can help merchants overcome these challenges by streamlining the payment processes and providing a unified API to integrate different payment providers and methods. They offer customizable checkout experiences, transaction routing capabilities, and tools for managing virtual wallets, subscriptions, and payment links. By centralizing transaction reporting and optimizing for fraud and failure rates, these platforms enable merchants to improve their payment conversion rates and ensure a smoother checkout experience for their customers. Additionally, they can provide valuable insights and expertise to help merchants navigate the complexities of the payments landscape in the MEA region.
Q: How can merchants future-proof their payment operations in the MEA region?
A: Future-proofing payment operations in the MEA region requires collaboration with experienced payment service providers (PSPs) and a commitment to adapting to evolving customer preferences and regulations. Merchants should consider working with payment orchestration platforms like MoneyHash that have extensive networks of integrations and expertise in navigating the payments landscape. By partnering with PSPs that prioritize customer requirements and can cater to the merchant’s growth trajectory, merchants can ensure that they have the necessary support and resources to scale their payment operations efficiently. Continuous learning and staying up-to-date with the latest payment technologies and trends are also crucial for future-proofing payment operations.
🔗 Reference Links: – MoneyHash’s LinkedIn – Partech Closes Second Africa Fund – COTU Ventures Launches $54M Fund for MENA Startups
