How payments deliver growth in the Middle East and North Africa
Berlin-headquartered Delivery Hero has a presence in over 40 countries. And, in markets across the Middle East and North Africa — where it operates under the talabat brand — it’s the leading local delivery platform.
Here, Emre Talay, Director of Global Payment Operations at Delivery Hero, explains how getting payments right is crucial to success in the region, and the challenges new businesses to the region face.
Payments are hyperlocal
“Payment is a hyperlocal business,” says Talay. “This complexity is always the challenge for international companies.”
“Different integration flows, user experiences, reconciliation files, authentication layers, chargeback liabilities and fraud levels, all need to be taken into account,” he says. “Consolidating each aspect can be quite tough; however, it’s required to offer a better experience to the customer in order to optimize the conversion.”
Conversion is Talay’s top priority – “the most important thing that payments can influence.”
“A smooth payment experience is the main driver to increase sales,” he explains. “We aim to build an experience in which customers don't feel any concern on the payment page, never get rejected in the payment flow, and are able to place their orders without any friction. Data is helping us build the foundation of the strategy; we regularly check fail reasons and user concerns by conducting NPS surveys to get more insight. Each insight is a component of a new feature of the product we are or will be building.”
Adapting to regional differences
With Delivery Hero’s expansive international operation, Talay has a well-developed view of the challenges companies face in different regions.
“I recommend building a country-specific strategy instead of one strategy for the entire region,” he says. “Local players dominate the industry in some markets, like KNET in Kuwait, therefore it can be harder to enter that market. Because there are not that many payment options in the region, we created marketing incentives by collaborating with our schemes and bank partners to encourage users to change the behavior toward online payments.”
Using COVID-19 as a positive catalyst
Like other merchants, he sees COVID-19 as the spark for a rapid evolution of payments in MENAP.
“The value proposition for digital payments changed overnight,” he says. “Suddenly it wasn't just convenience, but a matter of public health. And there was this huge shift from cash to digital payments across all markets without exception. In some markets, the shift is around 50% of the cash usage, which has converted to digital.”
The change has seen Delivery Hero explore a range of new ways to pay, including card-payment-on-delivery – leveraging the region’s high card penetration. Talay says pay-later options are also becoming popular, and have caught the company’s attention.
Finally, Talay reports an increase in customers saving card details to their accounts – a sign that these new purchasing behaviors are here to stay.
Building on payment progress
Still, there’s more to do to make sure that the rapid changes of 2020 are embedded in new policies and practices.
“Regulation is the key aspect in the fintech ecosystem and that is just being structured across many markets. I believe regulation will bring opportunities while implementing standards across the countries.”
He’s also conscious that a truly customer-centric approach means making sure progress works for everyone.
“Payments have evolved with the adoption of technology, and it has been driven mainly by the young generation. During the COVID influx, we have seen a spike in the error code ‘online payment disabled’. We know this is largely down to legitimate older users who still lack tech skills. I believe this is one area where payment service providers can create a difference by engaging with the issuer banks to improve acceptance rates.”
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