MENA: the new frontier for global brand expansion

What are the main challenges that global companies face when entering and adapting to the MENA region?

The Middle East and North Africa (MENA) region is on the expansion roadmap for most international payment companies. We see MENA as one of the last untapped markets for payment innovation. Having built payment companies across the globe, we’ve recognised that, whilst MENA is one of the most exciting markets in the world, it remains one of the most financially isolated. Many global brands are excited to expand to the region but are daunted by the many barriers to entry that make this market more challenging than others we see today. 

Each market in the region is unique, with its own regulatory complexities, banking systems, processes, and cultural nuances, making adapting a global product to the Middle East not a simple task. To operate in MENA, payment companies are required to make a significant local investment, hire local teams, and obtain local licences, all before they can even begin the lengthy process of opening a bank account, which can take more than nine months. Often, these companies also have to deal with local banks that have no understanding of how to work with a payment company, or how to adapt existing products to facilitate cross-border transactions. 

Before founding Fuse, we experienced the challenges associated with the limited local financial infrastructure in the region when scaling global payment companies. Fuse is built to solve this problem. We offer multi-currency virtual IBANs, a unique local product in the region, to enable payments and stored value across the Middle East, without the need to localise to each country. Before Fuse, local payment providers were solely geared to process payments for local companies. For larger cross-border payment companies, MENA is simply a small addition to their current geographies.

How can payment service providers interested in accessing the region overcome the hurdles of obtaining local licences?

At a glance, the regulations in MENA appear to be akin to those in the UK or Europe, sometimes even sharing a name or terminology. However, in reality, local regulations and their implementation differ from regimes elsewhere. The challenge is to understand the nuances of local regulations against the backdrop of regulatory trends. Building a compliance team with local regulatory insight is critical in order to obtain payment licences in the region. Moreover, showing a dedicated local presence in the country where you are applying for a licence is a non-negotiable for regulators. Compliance risks in these markets are unique, and regulators are particularly concerned about each company’s understanding of the space, especially given the region’s tight dependency on the US financial system.

Part of our approach was putting compliance at the heart of Fuse’s core business model. This was reflected in our decision to hire our Chief Compliance Officer, Kathryn Willis, as a founding team member. Kate's experience in enforcement at The Financial Conduct Authority (FCA), and later in international compliance for regulated companies such as Facebook and TrueLayer, has been pivotal for Fuse’s regulatory strategy.

MENA has traditionally been linked to the energy market, with oil and gas at the forefront. With the rise of micropayments, are there any emerging verticals, such as the gig economy, expected to see a boost in the region?

In recent years, Middle Eastern economies have shifted away from their historical dependence on oil and gas. Whilst these markets remain the largest suppliers of oil and gas globally, with significant untapped reserves remaining, they have focused time and energy on securing their future through diversification. This drive has provided a platform for sweeping transformation, especially in the payments and finance space. These generally inflation-resistant economies continue to grow steadily, despite the global economic downturn. This stability, driven by the oil and gas market, makes the region even more attractive for global businesses and gives each country the security to innovate at any cost.

The Middle East is considered the fastest-growing real-time payments market globally. What are the key trends in merchant acceptance of real-time payments in the region?

At this early stage in the market, we’re seeing high adoption of real-time payments. The regional market is forecasted to be valued at USD 2.6 billion by 2027.

The Middle East has capitalised on its late entry into the instant payment world by taking what works in other markets and learning from their mistakes, creating far more efficient systems than those we’ve seen in Europe.

What is the long-term growth potential of the MENA market for global companies?

About George Davis

George Davis is a serial founder. After starting his first business at the age of 18, George has gone on to lead payments at TrueLayer – launching payments for global fintechs such as Revolut, Freetrade and Trading 212 – and Paymentsense, where George led a payments division serving over 100,000 customers. Later, he co-founded global cross-border payments business BVNK as Chief Product Officer. Whilst building payments across the world, George saw the opportunity to develop a payment solution in the Middle East. This led him to found Fuse, a financial infrastructure company focused on supporting global businesses to access the Middle East.

About Fuse

Fuse is a financial infrastructure company focused on supporting global businesses expanding into the Middle East by enabling money movement in, around, and out of the region without the need for local entities, compliance, and currency management. Powered by a first-of-its-kind virtual IBAN solution in the Middle East, Fuse makes payments in your customer's name across the region without changing account details or sacrificing speed and liquidity.