This Middle Eastern Startup Is Getting Big In India
PayTabs is a fintech incorporated in Saudi with support offices in Bahrain and other countries in the Gulf. It’s a payment processing solution similar to Paytm and in addition it also works as a fraud prevention system against online payment anomalies. PayTabs' second biggest market is India and has made several Indian acquisitions, setting up an office here and has more local acquisitions lined up too.
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The need to fight fraud online came when PayTabs founder Abdulaziz Aljouf saw millions of money wiped out from an account. There were probably some tears involved too.
What’s special about PayTabs is not that it comes from a relatively small gulf nation or that most of its market is in the Saudi. It’s that it has managed to make India its second biggest market. Not bad for a fintech startup coming out of an ecosystem that’s just beginning to recognize the value of technology and local digital companies.
Across India it already has about 3000 merchants. India is a tough market to crack for anyone, even for big companies like Uber and Amazon; neither is a definite, undeniable market leader in their respective industries. Most of its Indian clients are IT companies that have clients in the UK and US. According to Aljouf, 9.5% of transactions in India happen via PayPal and 4.5% of transactions happen via PayTabs. “It took two and a half years to get into India. It took about a year to the proper licenses to start operations,” says Aljouf.
There’s also talks of taxing from the Indian government that won’t be happy news for payment gateways.
However things are expanding for PayTabs in India. The founder was recently in Mumbai looking at possible locations for setting up a dedicated office here in India, the first outside the Middle East. Sources say they also have acquired Juspay, an Indian payment gateway. Talks are underway to acquire two or three other Indian companies and Aljouf hopes to have definitive announcements in the next 3 months. These acquisitions are going to be of companies that can help increase acquisition of American customers, SMEs and schools here in India along with overall expertise in how to better leverage the Indian payments market.
Share with us what’s special about this venture and how it’s different from its competitors?
We have our own infrastructure and we don't really depend on banks anymore to do KYC, payment acceptance or dispute related processing.
We will also be coming out with our affiliated products like building a site in partnership with Shopify [a Canadian ecommerce company]; an event management system; and a payment wallet.
How did you manage to fund this idea?
One of the main issues in the [Middle East] region is funding so it took me a while and started the whole seeding fund out of my own pocket. [Since then PayTabs has had institutional funding too].
What are/what will be your monetization paths?
In a couple of ways, mainly looking to increase revenue through our up coming products that will increase usage of our platform.
Tell us how the business has grown so far
We have seen amazing growth so far and would have had more growth this year, were it not for certain legal issues in some countries related to licensing of our platform and delay of deals to be going live.
Still we will be expecting growth of 500% instead of 200% this year.
We are hitting more than twelve thousand customers in our queue and have around 4 products. We expect to release another 6 products in 2017.
What marketing strategies and plans are in place to grow the business?
Definitely looking at expanding presence in other countries and localizing PayTabs brands to the need of each country for each of our product offerings.
What is the market size and opportunity?
It’s really huge. I believe that a digitized cash industry will be worth around 105 billion dollars.
Any challenges faced setting up? Anything unique to your situation?
A lot of challenges been faced so far and we continue to do so. This is true for each country that we are present in. But I strongly believe that if you have the will to fix something and move on then you will do so.
We are the truly the first and only fintech company in the Middle East and proud to be so.
Share with us some best and worst memories while running the business.
I'll keep the worst memories to myself but the best was when one of the largest telecommunication companies in the Middle East approached us to use our services. The executives were so dressed up and I was wearing jeans and shirt only. They thought I'm the technical engineer and ask my chief of operations (who happened to be dressed up; probably a habit from being a professional banker!) to stay out of the meeting room until the high level discussion is done. :)
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