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When Leen Shami had to pay her share of the bill for a joint lunch order at the office, she became the first person in the UAE to use Ziina, a newly launched peer-to-peer payments (P2P) app. The Jordanian digital media marketing professional was able to transfer the amount of Dh55 within a few hours after downloading the app.
"My roommate and I now use it monthly to split our Wi-Fi, electricity and water bills. My roommate was having trouble setting up her banking app, so we were always paying each other back with cash, which was such an inconvenience. This has made things much easier," Ms Shami tells The National. She has since used the app on numerous social occasions.
Ms Shami heard about the app from her cousins, Faisal and Sarah Toukan, who banded together at the end of 2019 with their software engineer friend Andrew Gold. Ziina was made available for download on the Apple App Store and the Google Play Store in May. It has since acquired a few thousand users and completed hundreds of thousands of dirhams in transactions, says Mr Toukan, a 26-year-old Jordanian American.
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Ziina has been built and launched within the space of a year after Mr Toukan first saw Mr Gold build a peer-to-peer app to transfer the cryptocurrency Ethereum at a 2019 hackathon event in San Francisco. Earlier this year, the company raised $850,000 in seed investment, with participation from Samih Toukan’s Jabbar Internet Group and other prominent angel investors.
“We’ve been very pleased with our growth; we continue to onboard users every day for different use cases. We’ve seen people use Ziina to send money to loved ones, buy used furniture and pay for freelancers’ services,” Mr Toukan said.
Once users download Ziina, they complete a sign-up process by verifying their phone number and linking their bank account to the app. To send money, they search for the other person by name, enter the amount and confirm the transaction.
“Depending on which bank you have connected with, the first time you send money to someone, your bank may conduct a security check that can take up to 24 hours,” Mr Toukan says. “Every transaction you send to that person afterwards is processed instantly by Ziina. The money usually hits the recipient’s account within an hour, but sometimes this can take up to one business day.”
The social payment app does not require users to key in the beneficiary’s IBAN or Swift codes, but both parties need to have downloaded the app. Nor does Ziina take any fees, he adds – as opposed to banks, which often charge up to Dh1 per transfer. Mr Toukan says the app offers bank-grade security and end-to-end encryption and does not hold users’ money.
Many expats living in the UAE are already familiar with P2P payment services, such as Venmo and Cash App in the US and Tikkie in the Netherlands.
Dubai resident Becky Jefferies, a marketing director for a Silicon Valley-based financial technology (FinTech) company active in the Mena region, has used the Ziina app several times. Although she feels it could benefit from a refined interface, she says her experience has been seamless and simple, and she has been encouraging her circle of friends to download and try the app.
“I’ve been advocating it to my friends because it makes splitting bills [or trip costs or whatever you need to pay someone for] so much easier,” Ms Jefferies says. “I was an avid user of Venmo before I left the US in 2015 and I can’t believe it’s taken this long for something similar to become available in this region.”
P2P apps are relatively recent arrivals to the UAE, although they offer a way to improve financial inclusion among the underbanked segment. A June survey by the Central Bank of the UAE estimates that 15 per cent of the country has no access to any financial services and is “financially excluded”. The survey interviewed 5,134 people over the age of 15 years. About 39 per cent of those polled do not have a bank account compared with 31 per cent worldwide.
Mobile payment apps, not all of which require the user to have a bank account, can help bridge this gap, since more than 92 per cent of UAE residents have smartphones, according to YouGov.
“The average age of an individual in the Middle East is 27 years,” Mr Toukan says. “That is ridiculously low. At the same time, mobile penetration is through the roof. We have the infrastructure; it’s about time that someone built a financial application catered towards the region’s youth. Something that’s easy, intuitive and somewhere where people can park their finances.”
A recent Deloitte survey found that 82 per cent of Middle Eastern banking customers are keen on adopting FinTech products, but many lenders have yet to integrate available products into their networks. Only about 22 per cent of those surveyed – of 1,500 people in nine Mena countries – currently use FinTech products. Adoption is principally led by consumers in their 20s.
Mr Toukan says the region’s financial services market is rapidly approaching a watershed moment. “We’re at a significant inflection point in Mena when it comes to financial applications – as a result, the applications you interact with on a daily basis will be different in the next two years. The collision of open regulation and newly built infrastructure throughout the region has brought about the opportunity for consumer-facing FinTech platforms to come to life in the region.”
He expects companies of all stripes, from telcos and banks to start-ups, will soon move into the P2P space.
Several other players have either rolled out products or are building new apps to offer financial solutions that meet contemporary requirements.
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In June, Abu Dhabi-based FinTech PayBy announced a partnership with global payment solution uPay to service over 850 self-serve kiosks across the UAE. The integration lets users top up their digital wallets by adding cash to their accounts, as well as conduct e-commerce transactions and make cashless payments and P2P transfers, according to a company statement. PayBy is also integrated into popular instant messaging platforms such as TikTok and Botim.
In Dubai, three former Google professionals are developing another P2P app called Mamo Pay. The app will also allow users to send money to other individuals and businesses and will not charge transaction fees. The company announced an investment of $1.5 million in seed investment this April.
To stay ahead of the competition, Mr Toukan and his team have already begun onboarding small businesses to broaden the app's usage.
Among their partners is Sultana’s, a Dubai-based boutique bakery. Founder Maha Jaleel says receiving payments has been a core pain point for her business, and the app allowed her to circumvent the issue. “Furthermore, other apps have high commissions and are not feasible for small businesses like mine,” she says.
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Ms Jaleel says she was encouraged to offer the app as a mode of payment after hearing about other people’s experiences with similar apps in other markets. She now offers consumers a Dh35 discount if they book through Ziina. “Within a week of partnering with Ziina, approximately 60 per cent of my customers were using the app for their payments. Many of these repeat customers have continued to pay via the app despite the offer being only for the first order,” she says.
Over time, Mr Toukan hopes to add other services. These include remittance solutions, fractionalised solutions into different asset classes, including equities and cryptocurrencies, as well as a Ziina payment card. Many of these ancillary services will attract a small fee, which is how Ziina will eventually turn a profit – although Mr Toukan does not expect this to happen for some time.
“We see our future in autonomous finance, or self-driving money, where users essentially park their money in Ziina,” Mr Toukan says. Self-driving finance is a relatively new concept that turns finance into a service. It enables users to set financial targets, while the platform, typically enabled by artificial intelligence, figures out how to get there safely and within the shortest possible time via a range of connected FinTech services, such as robo-advisers and data-enabled strategic trading.
“So, for example, you pay for your groceries or whatever using Ziina. You’ll then have the automatic capability to transfer any remaining money into your savings or into equities. This is the future of finance,” Mr Toukan adds.