The MENA region has a new global fintech group – Wizz Financial.
On the heels of its acquisition of Finablr, the leading fintech and remittance platform in the MENA region and India, Prism Group AG and Royal Strategic Partners have signed a SPA to acquire BFC Group Holdings (BFC) and its subsidiaries: BFC Bahrain, BEC Exchange (Kuwait), BFC Payments and BFC Forex and Financial Services (India) via their newly created Wizz Financial platform. Finablr is present across all major emerging markets, while BFC has a strong presence in Bahrain, India, and Kuwait; together they create one of the MENA’s largest money transfer groups.
Wizz Financial has now become the only operator in the region with a presence in all six GCC countries and has over 5,000 employees and commercial partnerships with 140 banks. This is exciting news for the fintech landscape of the MENA region, which has been seen as a hotspot of growth in recent years.
“The deal creates one of the largest remittance services and currency exchange groups in the MENA region and becomes the only operator with a direct presence in all six GCC countries. The acquisition creates a regional powerhouse with licenses to operate in over 30 countries,” a Wizz Financial statement said.
“(Wizz Financial is) in the process of consolidating additional remittance providers and alternative financial institutions onto our platform,” said Amir Nagammy, a UK-based financier and investor who is chairman of Prism Group AG, a private equity firm that forms one half of the financial consortium behind Wizz Financial.
Prism Group AG was founded by Amir Nagammy and Guy Rothschild and has offices in the UK, Switzerland, and UAE. The company is known for its interest in innovative ventures and backs established companies and startups that leverage technology to drive transformation in the financial services, biotechnology, and renewables industries sectors, amongst others. Driving the company is Amir Nagammy, who has a 25-year track record in building and scaling companies in the UK, GCC, and emerging markets.
Why Fintech investments are on the rise
Wizz Financial is just one of the many promising fintech companies to emerge from the past year. The sector as a whole is having a huge moment, and, according to the World Bank, fintech is one of the few industries that have reported growth during the pandemic. The study, conducted in collaboration with the World Economic Forum and the Cambridge Centre for Alternative Finance, showed that fintech was very resilient when faced with the economic challenges of COVID-19 and that it poses great opportunities, especially for developing countries.
Only a niche market at first, fintech has disrupted the financial industry and changed the way people interact with financial services such as payments. Although it’s a global movement, fintech was particularly lucrative in North America and the Middle East, where it grew by 40% in one year. In North Africa, fintech reported a 21% growth. Here, VC funding for fintech startups gained 51% more in funding.
Fintech’s resilience to the COVID-19 crisis may seem surprising, but it’s precisely the digital model that makes it adapt better to challenges and develop innovative solutions when other conventional fields are struggling. We shouldn’t forget that fintech itself has its roots in the 2007 recession. When most banks struggled, fintech startups leveraged the power of technology to fill the gaps in the finance industry and offer services that people had wanted for years. Now, finance finds itself again in a period of uncertainty, and fintech startups use the challenges of the time as growth opportunities.
Digital payments are one of the most lucrative fintech subsectors, and their growth was accelerated by the pandemic. According to one report, the total transaction value reached a whopping $5.4 trillion in 2020, and it’s on track to reach $11.2 trillion by 2026.
Of course, digital payments aren’t unique to the pandemic. The demand for them was increasing before COVID-19. The pandemic only fast-tracked the trend, turning digital payments into one of the most coveted fields for investors. Here are some of the reasons why digital payment adoption skyrocketed in the past year:
The growth of e-commerce
In 2020, most stores had to shut down temporarily and sell exclusively online. As a result, the global e-commerce industry went through a massive boom and grew by 25.7%. In the US, e-commerce grew by 44%, and online stores reported over $4.4 trillion in sales. Most sellers didn’t close their online stores once physical stores were allowed to reopen because they noticed that e-commerce is a significant stream of revenue.
Friendly legislation
Many countries passed government policies that encouraged e-commerce and set up a legal framework that protected customer rights and prevented fraud.
Changing consumer behavior
In the past, many people feared paying for things online or with credit cards, fearing that the process would be complicated, time-consuming, or that there would be errors. Now, people have become so accustomed to the idea of digital payments that they expect every vendor to offer them this option.
Convenience
Apart from the fact that authorities recommended cashless, contactless payments during the pandemic for safety reasons, digital payments are generally more convenient because they only take a few seconds, and you no longer have to worry about carrying change or walking with high amounts of money on your person.
Greater awareness
A few years ago, digital payments awareness was relatively low and restricted to early adopters and fans of technology. Today, digital payments technologies have broken into the mainstream world, and most people have either made a digital payment or are aware of this option’s existence. For example, the number of people in the US who have made or received digital payments increased from 87% in 2014 to 92% in 2017. One study estimates that, by 2023, 6.1 billion people will use digital payments.
Higher safety
As digital payments become more popular, cybersecurity concerns are also increasing. Fortunately, the Fintech industry is one step ahead of cybercriminals and constantly invests in 3D secure technologies that help merchants protect their clients’ bank accounts and transaction details.
