Visa On The Role of ‘Super Apps’ In Driving Emerging Market Growth

“Careem” is an Arabic word meaning, in part, “noble, admirable and praiseworthy.”

In the case of Dubai-based ride-hailing and delivery platform Careem and its efforts to modernize payments in the Middle East North Africa (MENA) region, add “timely” to the list.

The platform’s deal with Visa to bring enhanced payments together with financial management tools in-app for consumers and Careem Captains — the gig workers who comprise its indie workforce — is another win, after being acquired by Uber for $3.1 billion in January.

Bringing digital finance to emerging markets like MENA is crucial, as micro merchants of one to two people, often underbanked or unbanked, drive these regional economies. Many are from one country and working in another, sending money cross-border to people back home.

For these human reasons, as well as promising commercial prospects on the horizon, Otto Williams, vice president, head of strategic partnerships, FinTech and ventures CEMEA at Visa, recently told PYMNTS’ CEO Karen Webster, “The ability for [gig workers] to be able to receive [payments] in real time, as opposed to waiting a week to actually capture those earnings, is really important because they’ve got to live [in another country] and also be able to send money back home.”

Digital Platforms Drive MENA During Pandemic

Just how important that ability is became quickly evident during the global pandemic, as the MENA region shut down like the rest of the world. Modernized payments for Careem Captains “[were] especially important during COVID,” Williams said, as ridesharing and delivery services became a key conduit for crisis supplies and the professionals who use them.

Noting that Careem passengers and cargo during lockdowns “…tended to be essential workers on the frontlines, [and deliveries of] food and groceries to people during lockdown,” Williams told Webster that “Being able to get fund[s] to [gig workers] ASAP has been critical.”

Providing Careem platform users with Visa credentials creates new access to use eCommerce platforms and more fully participate in digital commerce as COVID-19 recedes, also leveraging Visa’s considerable know-your-customer (KYC) protections to bear for users of the Careem platform.

Along with this also comes peer-to-peer (P2P) transfers, scan-to-pay capability, and plans to expand the acceptance of QR codes that are enjoying a rebirth of new post-pandemic purpose.

“We’re enabling new experiences to help micro merchants accept payments digitally, and this is really driving expansion for that base,” Williams said. “Partnerships are really key.”

Visa’s rails and extensive network provide Careem users with more access for younger consumers across the MENA region, who want to use subscriptions to be able to watch Netflix and buy digital goods, Williams told Webster. Extending Visa credentials to this base makes it possible for people who are largely paid in cash to digitize funds and have them show up in their digital wallet to pay bills, shop online or send money across borders.

Additionally, people and businesses in the MENA region want full app-based access to everyday digital availabilities that developed markets take for granted. Visa’s pact with Careem, Williams said, “is a natural expansion for a consumer base that is [becoming aware of] a consolidated digital experience. The cost and convenience of just [paying utility bills] or [sending] remittances [in-app] without having to find a [way] to pay in cash is significant.”

Telcos, Too

Because cellphone penetration beat payments tech to MENA and other emerging markets by years, carrier billing remains a dominant mode of digital payment. Carrier billing is well established in this part of the world, so it’s part of Visa’s efforts to expand digital options for people living in the region.

“We’re definitely very active with telecos in our region,” Williams said, with a nod to the massive base of mobile phones held by unbanked individuals who rely on carrier billing. “If you’re going to be able to access that consumer, that segment, it has to be through the telco platform with telco relationships,” Williams told Webster.

Super Apps And MENA’s Future

At the time of the Visa announcement, Junaid Iqbal, managing director of Careem Pay, said in a statement, “The partnership with Visa will not only solve cash flow constraints, but will also provide many new use cases to improve the everyday lives of Careem customers.”

Iqbal may have been obliquely referring to Careem’s new super app, introduced in June.

In an early June tweet, Careem Co-founder and CEO Mudassir Sheikha said, “The Super App brings us closer to Careem’s purpose of simplifying the lives of people in our region so that they can spend more time on things that really matter and on realizing their full potential. Our hope is that the Super App will unleash potential and accelerate the digital transformation of our region that will help us emerge stronger from this crisis.”

On that front, it’s so far, so good for Careem. According to Bloomberg, “Business is still down 50 percent to 60 percent from last year but has recovered from a slump of more than 80 percent in March and April.” That report quoted Sheikha as saying, “We have started to see recovery since early May, and business has been growing week-on-week double digit.”

It’s the glimmer of prosperity the partners hope to propagate for micro merchants and others. The pandemic delayed many planned payments projects in the MENA region, as elsewhere, but the momentum has been maintained, as payments tech is serving new constituencies there.

“It’s not just about meeting consumer needs,” Williams said. “It’s also about strengthening small business and marketing capabilities. We’ve been investing in bringing forth more digital acceptance payment options. We’re also seeing contactless accelerate across our markets.”

“We are engaged in that,” he added, “and it’s bringing Visa credentials to that base. They can make purchases online, cross border, or for eCommerce and bill pay.”