# Paymob: Revolutionizing Digital Payments in the Middle East and North Africa
## Addressing the Gap in Digital Payments
In a region where successful tech startups launched by young founders are few and far between, Paymob stands out as a shining example of innovation and entrepreneurship. Founded by three undergraduates from the American University in Cairo, Paymob embarked on a mission to revolutionize the e-commerce industry in Egypt. At the time of its launch in 2015, e-commerce participation in the country was a mere 2%, primarily due to a lack of online payment methods. Paymob saw this gap and set out to bridge it by creating a payment infrastructure for digital wallets.
According to Islam Shawky, one of Paymob’s co-founders, “There was a gap between what banks were offering and the financial technology requirements of new business models. No one had been tackling digital payments for e-commerce and digital native startups.” Paymob’s innovative approach quickly gained traction, and what started as a small venture has now evolved into an omnichannel gateway offering over 50 payment methods to more than 350,000 merchants across the Middle East and North Africa.
## Cross-Selling Services for Growth
Paymob’s success can be attributed to its ability to cross-sell additional services to its growing merchant base. By providing a suite of products through partnerships with leading platforms like Shopify and Tabby, Paymob has significantly improved its margins and expanded its reach. For instance, if a Paymob customer only has a point-of-sale (POS) terminal that accepts cards, they are only covering a small fraction of their business. However, by offering embedded checkout experiences, lending services, and advanced settlements, Paymob has become an indispensable financial services enabler for businesses in the region.
This strategy has not only helped Paymob increase its merchant numbers but has also contributed to its profitability. In fact, Paymob became profitable in Egypt for the first time in the second quarter of this year, with revenues growing sixfold since mid-2022. By building a fundamentally sound business and addressing the needs of its clients, Paymob has demonstrated that it is possible to achieve rapid growth while reaching profitability.
## The Rapid Adoption of Online Payments in the UAE
The demand for digital payment methods is not limited to Egypt; it is also rapidly growing in the United Arab Emirates (UAE). A staggering 77% of the UAE population has adopted digital payment methods, making it a highly attractive market for fintech companies like Paymob. Within just 14 months of operating in the UAE, Paymob’s transaction volume in the country has already matched the size of its entire Egyptian business, which took five years to build. This can be attributed to higher purchasing power, currency strength, and the widespread use of digital wallets in the UAE.
While the UAE presents a significant growth opportunity for Paymob, Egypt remains its largest market. Shawky believes that with the government’s and central bank’s efforts, combined with Paymob’s suite of products, Egypt can achieve the same level of digital payment adoption seen in the UAE. He emphasizes the importance of both issuance and acceptance going hand in hand for the economy to reach an inflection point. The central bank’s investments in digital infrastructure and Paymob’s continued merchant acquisition efforts have already led to a six-fold growth in the past two years and four months.
## Paymob’s Continued Growth and Series B Funding
Paymob’s impressive growth and potential have not gone unnoticed by investors. The fintech company has raised over $90 million to date, with a recent extension to its Series B round bringing the total to $72 million. PayPal Ventures, a leading investor in the initial Series B round, also participated in the extension. Other notable investors include Endeavor Catalyst, British International Investment, FMO, A15, Nclude, and Helios Digital Ventures.
While Paymob has not disclosed its updated numbers for total payment volume and transaction count, its previous figures speak to its remarkable success. In 2020 alone, Paymob reported a total payment volume of $5 billion and facilitated over 120 million transactions.
## Conclusion
Paymob’s journey from a small startup to a leading fintech company in the Middle East and North Africa is a testament to the power of innovation and entrepreneurship. By addressing the gap in digital payments and cross-selling additional services, Paymob has not only achieved significant growth but also profitability. As the demand for digital payment methods continues to rise in the region, Paymob is well-positioned to further expand its reach and contribute to the advancement of a cashless society. With its recent funding and strategic partnerships, Paymob is poised to lead the digital payment revolution in the Middle East and North Africa.
