Prepaid Cards Streamline Expense Management, Solve Major Pain Points for MENA SMBs

Some of the most underbanked populations in the world can be found in the Middle East and North Africa (MENA), where countries like Egypt have bank account ownership rates as low as 22%.

While increasing bank account access is certainly an important aspect of any financial inclusion agenda, financial technology has a way of working around low bank penetration and increasing the ability of underbanked populations to pay and save in an increasingly digital world.

In recent years, one of the most important solutions curbing the challenges of financial exclusion in the MENA region has been the emergence of prepaid cards. These give people without a bank account a means of making electronic payments, while also empowering them to move within a digital economy that they would otherwise be locked out of.

Related: Prepaid Cards Use Tokenization, New Form Factors in Pursuit of Better CX

For example, the Egypt-focused FinTech dopay helps employers create prepaid cards as a payroll solution instead of paying workers in cash, which saves them from the hassle of handling cash, reduces fraud and security risks and streamlines bookkeeping.

Employees also benefit, as they receive their wages on prepaid cards that can be used to make ePayments. The funds can also be withdrawn as cash if they prefer.

See also: UK-based dopay Makes Payroll Cashless for Workers in Egypt

Laying the Infrastructure for MENA Prepaid Cards

While general-purpose prepaid cards have been around for some time, in recent years, both Visa and Mastercard have been beefing up the infrastructure needed to issue them in the MENA region.

For example, just last month, Mastercard announced a partnership with the Egyptian FinTech Telda to allow Egyptians to easily issue their own payment cards through the Telda app without needing a bank account.

When PYMNTS discussed the topic with SimpliFi Founder and CEO Ali Sattar last year, he pointed to multiple benefits for businesses opting to make payments via prepaid cards. These include a new revenue stream via the interchange fees, which would normally go towards a bank, and the opportunity to leverage the data created by card schemes.

Most importantly, he said, the businesses that issue cards do not need to have expertise in development or finances.

“You don’t have to have an army of finance people in the back office, reconciling and pushing payments through different banking channels,” Sattar explained.

Read Sattar’s full interview: Cards-as-a-Service Tackle MENA’s Market Fragmentation

Today, a key enabler of the MENA region’s prepaid card ecosystem is the United Arab Emirates-based Banking-as-a-Service (BaaS) company Nymcard, which helps businesses in the region issue a variety of virtual and physical card products, including prepaid solutions.

Leveraging its suite of over 100 application programming interfaces (APIs), Nymcard allows financial institutions to build, launch and scale their card programs across multiple markets. According to the company’s CEO and co-founder, Omar Onsi, Nymcard is able to do all this because it has built a regional, cross-border infrastructure and license network.

“Each of the MENA markets has its own complexities,” Onsi told PYMNTS in an interview, adding that what Nymcard does is “give [FinTechs] the rails they need, simplified by modern APIs that then plug into their applications and systems and get them up and running as frictionless as possible.”

Learn more: The Key to Solving MENA Banking Challenges Starts With Regulators

In June, Nymcard became a Principal Mastercard Issuer in the UAE, a milestone announcement that marked the first time a FinTech in the country had been licensed to issue cards by Mastercard.

Last month, the Emirati FinTech Pemo, which uses Nymcard’s technology, also announced the launch of physical and virtual Visa payment cards through its spend management solution for small- to medium-sized businesses (SMBs) in the UAE.

Proving the diversity of use cases for prepaid cards, Pemo users in the UAE can now distribute prepaid smart cards to employees for the purpose of expense management. The solution allows the primary account holder to set parameters, such as unlocking access to select vendors or limiting total spending, and businesses can further track expenses in real time through the Pemo dashboard.

Read more: Pemo Adds Smart Cards to Spend Management Platform for UAE SMBs

Commenting on the new product, Onsi said: “We are thrilled to be enabling such an innovative product like Pemo on our modern BaaS platform. Pemo is solving a major pain point in the region by offering prepaid and virtual cards to SMBs in order to streamline their expense management process, making it a lot simpler and easier.”

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