As e-commerce has boomed, it has reinvented the consumer’s traditional way of shopping, created new customer experiences, disrupted business models and created growth opportunities for retailers of all sizes, as well as providing space for a new generation of exclusively e-commerce players.
Over the last 10 years, fintech is another fast-growing sector. In the MENA region, the burgeoning fintech market is expanding rapidly with a CAGR of 30 percent. What is interesting is how fintech and e-commerce have been woven together. As e-commerce increased during the pandemic, consumers demanded more, and they wanted it faster and better. We quickly realized that we had the knowledge and experience to meet these growing needs and be able to utilize our expertise to offer a more efficient, practical and streamlined alternative to in-store purchases.
In a post-pandemic world, consumers are living a new lifestyle, focused on efficiency and convenience. Fintech solutions facilitate payment processing, mainly optimize the payment process and remove any points of friction. For example, most e-commerce sites offer the ability to store payment and shipping information, along with automatic check-out and one-click purchase options, all of which significantly reduce check-out times and provide a more efficient customer experience. The checkout process was further enhanced through digital wallets and virtual credit and debit cards, which offer a more secure online alternative to traditional card payments.
Virtual cards are in fact an important driver for growth in e-commerce in the region, and give the non-bank population an opportunity to participate in e-commerce. Within the UAE alone, there are 1.7 million individuals without a bank account, which makes up 32 per cent of the working population. Virtual cards can be used for purchases online or in apps, no matter where the international card brand is accepted. Finances are easily managed through the app, without the need to obtain a physical card or visit a bank. Virtual card issuance technology supports financial inclusion and presents a broader market for e-commerce players to take advantage of.
Fintech can enhance the customer experience through automated recurring payments – a technology that forms the basis for Buy Now, Pay Later (BNPL) services. Through BNPL services, sellers are more likely to make large purchases online since consumers do not have to pay the full amount at once. They can also reach those who do not own a credit card and previously would not have been able to afford the purchase.
AI-based algorithms enable trend analysis and real-time data collection regarding user issues and consumer patterns. This valuable insight increases sales through e-commerce platforms by enabling salespeople to make informed decisions regarding product inventory, marketing tactics and expansion opportunities.
Meanwhile, customer experience is at the heart of e-commerce growth. Since today’s consumers demand personal and frictionless shopping trips, speed, convenience, security and efficiency have become the ultimate indicators of a successful e-commerce business. For the fintech industry, it has become a priority to constantly develop new and innovative ways to improve the customer experience, and create a synergistic relationship between the two industries that support economic growth as a whole.
Ghady Rayess is the co-founder and CEO of FOO
Read: How fintech solutions can support small exporters
