Fawry is preparing to join Egyptian Exchange (EGX) over the upcoming period after 10 years since launching the company. Some of the investment funds with shares in its capital include Helios, IFC, Responsibility, and the Egyptian American Fund. With the company's strong growth rates over the past years, it is seeking to increase its presence directly through smartphone applications as well as expand its presence in payment operations to be available for traders and clients. Daily News Egypt interviewed Ashraf Sabry, the CEO, about the upcoming period and growth opportunities as well as the progress of the company and reducing cash payments. He stressed that since 2014 the company has had an interest in smartphone applications and that is when it launched its application. Additionally, 22 banks adopted its infrastructure through smart wallets, and soon two mobile operators will do that as well. Sabry said that the company was one of the first to put the mobile application as one of its strategic aspects. Cash is still dominant in Egypt He pointed out that the current statistics for the banking card rates showed that 91% of users utilise it for cash withdrawal transactions on ATMs, and only 9% to pay through e-platforms and payment networks. Furthermore, Sabry believes that awareness campaigns are not the solution to spreading the culture of electronic payment especially since the digital world welcomes applications that facilitate its work or saves time and effort. There is a greater role for companies and the financial community to create value and benefit to the consumer in using cash. Moreover, one of the solutions is to create a full payment cycle, starting from income to all financial operations regardless of their size, he added. The company's CEO pointed out that there is a presence for an e-payment platform for the company on the majority of ATMs in an attempt to create that full cycle, especially after annual growth rates of e-payment platforms showed an annual growth between 70-80% compared to cash payments which only grow by 25% per annum. Sabry denied that any means of payment in the future could end even in the world's most advanced countries. Cash, electronic payment, card payment, telephone applications, and other methods will continue to work side-by-side. Market share for each route varies according to growing trust and acceptability. There is no reason that may force people to adopt a method of payment instead of another, as this is up to everyone and the benefit they receive, especially that electronic systems may be more expensive for people than cash sometimes, he explained. Additionally, he added that a number of developed countries, such as Switzerland, Germany, and Japan, still have a relatively large share of cash transactions, as consumers rely on prepaid cards and payroll cards, especially since traders and consumers do not accept payment of mediation fees to payment companies, banks', and card issuers, unlike the countries where credit cards have been used to finance consumer purchases. The latter has helped spread the culture of electronic payment in the United States market, where shopkeepers see an opportunity to increase sales by giving away a share of profits to financial intermediaries. On the other hand, Sabry says he sees great opportunities in the spread of smartphones, with the possibility of using electronic wallets anytime and anywhere, but its services are limited to digital transactions such as e-commerce and payment of fees and invoices, expecting to see a boom in e-payment operations through smartphones. Over and above, Sabry pointed out the success of the company's experience in launching the service of payments of car license fees and delivery to customers since 2014, which benefited about 370,000 customers, all of which embodied one of the facilitation ways for customers and was therefore attractive for grabbing a share of this market. Reducing costs is key for further penetration With regard to the cost of operations, there is no single indicator that can measure the difference in cost. The more the payment service offers a cost advantage, the higher the number of its users, so the future cost of services cannot be predicted, according to Sabry. When asked about the difference in the cost of services between the Egyptian and Chinese markets, as e-payment services reach all users, Sabry said that the infrastructure of the Chinese market is different from Egypt and companies such as ‘Alipay' and ‘WeChat Pay', targeted since its launch expanding the user base by passing small value transactions without commissions or costs borne by the user, to increase the spread of electronic payment services to ultimately contribute to “closing the circle” from income sources to all channels of expenditure and savings. Sabry also pointed out that accepting electronic transactions between individuals encourages their increased spread. Whenever the circle is closed, all people accept dealing with e-transaction and there becomes a need to liquidate money, which can also be optional and therefore the desire to make transactions more easily increases. On the expectations of the electronic payment market after the passing of 10 years since the establishment of the company, Sabry said “Surely Fawry has become a popular name in e-payment," pointing out the market research carried out by the company which shows that 95% of the sample used know very well the services Fawry offers. "The company has also managed to cover 100% of the Egyptian market in 10 years, with the society's various classes and age groups, added Sabry. The CEO of Fawry said that the other achievement for the company is reducing the cost of transactions for classes with a low income, as the cost of transactions is invariably proportional to the level of income. The richer the person is, the more facilities he has to obtain service at a lower price, however, for some lower-income classes, there are Fawry outlets in villages and informal housing areas that contribute to reducing the cost for them. He noted that the multiplicity of places to provide services, whether through ATMs, points of sale (POS), e-wallets and mobile applications, has put ‘Fawry' at the top among e-payment companies globally. The current government interest in spreading financial coverage and digitising services was a greater opportunity for the company's growth and services, he added. “We needed the government to save time and effort to facilitate subcontracting procedures with subsidiaries, which took about four years in some authorities. The achievement could have been greater and faster, to help accelerate the cycle of funds and growth of the GDP,” he said. Noteworthy, Fawry obtained the approval of the ministry of finance to collect funds through its platform in May 2012, and it succeeded to collect the first electricity bill by the end of 2013 and provided a service delivery of home licenses in 2015. Sabry sees better opportunities at the present time as the Egyptian state is moving toward electronic payment, especially since the last meeting of the government which focused on digitising services. He called for the need to raise government ambitions more than normal rates, stressing that the rapid and successive developments in the contemporary world do not make the objectives of traditional development achievement and may even cause more delays compared to other countries. In addition, he said an example is the appearance of Google and Amazon applications that respond to voice order to pay bills and debts. Sabry revealed that the Africa Cup of Nations 2019 (AFCON) will be using Fawry as a portal for the electronic payment of the tickets of the matches which will be held next month in Egypt. Furthermore, he said that his company focused on investing in 2014 and 2016 on applications related to the future more than natural investments in its activities such as mobile applications and some companies in the complimentary business sectors. He added that the company would not have reached that stage of growth if it were not for a team of nearly 200 developers and programmers, working to find solutions to all problems on an ongoing basis. Egyptian market has strong growth potential In the same context, Sabry said he believes that the chances of growth of the Egyptian market are still great, especially that about 50% of the phones sold in the market are ‘smartphones', additionally, there are about 58 million mobile phone users in the market, including 40 million users surfing the internet through their phones and about 44 million that have accounts on social media sites, which indicates the spread of digital culture. This enables e-commerce operations to grow, provided that companies can invest this momentum in providing services suitable with the needs of people, and is one of the main strategic trends of the company during the upcoming period. He considered that the acceptance of electronic payments by merchants either through websites or within shops is the company's second strategic focus, as the company's first focus was becoming the first company to obtain licensing for opening merchant accounts in Egypt. He believes that the chances of the company entering and expanding its dealings with traders are great, especially since some traders' transactions do not qualify them to deal with banks, which opens the door for Fawry to enter the field. The company has launched a service for merchants to pay directly to suppliers. Some of the clients include Coca-Cola, Juhayna, Almarai, and Heinz. With regard to the final consumer, Fawry has expanded by providing bus and cinema ticketing services as well as the delivery of syndicate subscriptions to enrich the use of Fawry services. The company has also launched the ‘Ebeneh Matgarak' service to provide an integrated platform for e-shops including payment services to achieve greater success rates. Sabry stressed that cooperation with banks was the source of the company's strength in the past and will continue to be a strong catalyst for the company's future role. The current challenge is to increase the number of customers with banks to complete the cycle. On the other hand, Sabry believes that the role of the International Finance Corporation (IFC) has contributed to increasing dealing with international experiences and exchanging experiences with institutions that perform the same role in other countries. He said that Fawry Plus has dealt with seven banks to launch its services, as the company plays the role of the agent in providing financial services to banks subscribed for the services for millions of customers who are not included in the banking sector. The services provided include registration and application services, loan repayment and credit card receivables, as well as cash deposits and withdrawals from individual e-wallets, in addition to delivery and collection services, ATM services, and cash deposits. Fawry Plus for banking services was established in 2017 through a partnership between the Commercial International Bank, Banque Misr, Fawry and ACIS. Sabry revealed that the shares of the company will soon be offered in the EGX as a necessity for the company's business to put it into a governance frame. He did not reveal the exact date of the offering which would require internal arrangements and preparations before the actual offering. He also added that a final plan for the percentage of the offering has not been determined, however, it must be attractive for foreign investment fund capitals. In addition, Sabry said that the company is growing 40% annually in terms of business volume. This means that other indicators will have higher growth rates. He revealed the volume of invested funds invested annually ranges between EGP 250m to EGP 300m, and the funds are self-financed and the company has sufficient resources to cover its own investment needs. Recently, the company has taken a strategic approach toward completing the financing circle through investment in technology start-ups. Fawry has invested in three emerging companies, including ‘Tazkarah,' which offers bus tickets booking services via telephone or through the website, and relies on the infrastructure of Fawry in collecting funds. Another company is ‘Bosta' which works to deliver electronic products to customers with the possibility of tracking the shipment route from the start until it reaches the customer. Fawry is an integrated financial network through which cash transactions can be converted into electronic ones, with 85,000 POS, filling the gap in the spread rates of banks' ATMs. As for ‘Meeza' cards, Sabry revealed that the company has completed the tests for the operation of the cards, as well as the documentation of its technical identification certificates, its shipment and what remains is deciding the date of beginning its operations.
