Dubai-based buy now, pay later platform Tabby and payments company Paymob have signed a deal that allows businesses in Egypt to process Tabby's interest-free flexible payments solution via Paymob’s gateway.
The partnership between the two regional FinTech companies will create a "seamless" BNPL solution for both in-store and online retailers, the companies said on Tuesday.
It will help to develop an ecosystem that delivers value to merchants as well as customers, they said.
“Today, there is a strong demand for greater financial freedom and flexibility to enable consumers to make their purchases,” Ahmed Khalil, Tabby Egypt’s general manager, said.
“Partnering with Paymob allows our technology to be instantly accessible to their network of over 120,000 retailers in Egypt.”
Tabby, which is backed by Abu Dhabi’s sovereign investment arm Mubadala Investment Company, expanded into the Egyptian market earlier this month to capitalise on the growing e-commerce sector in the most populous Arab country.
Tabby offers consumers interest-free, flexible payment options as the cost of living continues to rise in the Arab world’s third-largest economy. The move is aimed at helping Egyptians to stay in control of their spending and make the most out of their money, the company said at the time.
Egypt's annual core inflation rate increased to 16.7 per cent annually, up from 15.6 per cent in July, central bank figures show.
The BNPL business model, which allows consumers to make online purchases instantly and spread their payments out over interest-free instalments, has boomed since the onset of the Covid-19 pandemic, driven by millennials and Generation Z.
High inflation has further driven the popularity of the BNPL payment option globally, with consumers taking advantage of short-term financing to split payments and better manage their finances.
“The variety of innovative, customer-centric digital payment methods in the Mena region is skyrocketing,” Omar El Gammal, Paymob’s executive vice president for global business development, said.
“Our partnership with Tabby is key because it encompasses both physical, in-store and online e-commerce payments solutions to provide a better checkout experience, increased conversions and an expanded client base for merchants in Egypt.”
Egypt’s BNPL sector is projected to surge almost 133 per cent on an annual basis to reach $434.7 million in 2022, according to a report by Research and Markets.
BNPL payment adoption in Egypt is expected to increase at a compound annual growth rate of about 56 per cent between 2022 and 2028, while gross merchandise value is estimated to reach $6.23 billion by 2028, from $186.7m in 2021, the report said.
Tabby has helped "thousands of merchants" across Egypt, the UAE and Saudi Arabia increase their average order value by 33 per cent on average, the company said on Tuesday.
The platform has boosted merchants' overall conversion rate by more than 18 per cent and increased the number of returning customers by 40 per cent.
Tabby, which has more than two million active users and about 6,000 merchants in its network, went live in the UAE in February 2020. It expanded to Saudi Arabia in July 2020.
In August, the company raised $150m in debt financing from New York-based Atalaya Capital Management and existing investor Partners for Growth to help fund its global expansion.
It also raised $54m from Sequoia Capital India and Saudi Arabia’s STV in March, in a round which also had participation from existing investors.