New online payment system to link Mideast, Southeast Asia

By Arno Maierbrugger/Bangkok

A Singapore-based company last week announced it has set up a new service, Telr, that aims at becoming a “payment gateway for emerging markets,” namely the Middle East and North Africa and Southeast Asian countries.

Set up by Elias Ghanem, formerly managing director for the web-payment service PayPal in Middle East and North Africa based in Dubai, the new service will combine payment, logistics and debt financing. Payment solutions will include credit and debit card payment, cash-on-delivery, mobile payment and payment at third party locations, where customers pay cash at local stores and retrieve deliveries later, Ghanem says.

He is focusing on the Mena and Southeast Asia regions as studies have shown that online transactions in the Middle East will account for $15bn by 2015, and the broader market that entails the Arab World, Africa and Southeast Asia will be worth some $100bn by that time.

So far, merchants in these regions have had problems to bring their business online because of high costs, lack of working capital financing and problems with unified payment and logistics integration as compared to the West. Exactly these issues is Telr trying to address.

“Especially in high growth regions, consumers purchase online mostly from e-stores in US and Europe for the lack of local supply,” says Ghanem. For example, 90% of online transactions in the Middle East occur on foreign sites.

Telr, in its special approach to these markets, is planning to provide online and mobile multicurrency payment gateway processing services to merchants in emerging markets, in the consumers’ currency and language of choice, Ghanem explained.

While incorporated in Singapore as part of the city state’s startup accelerator GHX, an operational headquarter will be set up in Dubai to begin serving the Middle East market by the third quarter of 2014. In a first step, Telr will be targeting the few popular e-commerce websites in the Middle East, Souq.com, MarkaVIP, and Namshi, and bring more and more merchants on its platform with the target to reduce the 90% of foreign online transaction to 20%.

However, Telr is not the only one on the market even though its offerings and proprietary technology are different. It will have to compete with Dubai-based Payfort, which sees itself as the leading online payment service provider for the Arab World, as well as Cashna, an Australian company that has offices in Saudi Arabia, Kuwait, UAE, Jordan and Egypt.

The main challenge in the Middle East as well as in Southeast Asia has been that the regions’ payment systems are incoherent and, in most cases, too expensive especially for smaller companies seeking to develop e-commerce systems. Furthermore, the bureaucracy which needs to be overcome when signing up to these gateways is prohibitive for most e-commerce companies.

“The inefficiencies in most payment gateways in these regions make the industry ripe for disruption,” says Ghanem. This is why Telr sees itself able to drive no less than an “e-commerce revolution” there.

Ghanem: Regional focus.