Mashreq, the Dubai lender controlled by the Al Ghurair family, said it acquired a stake in banking-as-a-service provider NymCard in a move to support FinTechs in the UAE as cashless transactions surge due to the coronavirus pandemic.
The bank is investing in NymCard through its venture fund that was created to support the growth of the FinTech ecosystem in the UAE, Mashreq said on Thursday. The lender, however, did not disclose the value of the deal or the size of the stake.
“The UAE has witnessed significant growth as a FinTech hub, both from an investment perspective and from a burgeoning crop of tech-savvy innovators, and this shows no signs of abating,” Fernando Morillo, global head of retail banking at Mashreq Bank, said.
“We recognise the crucial role the FinTechs play in growing financial inclusion and the digital economy and will continue to identify opportunities, invest and support our partners to help drive this growth.”
NymCard provides a platform for large and small FinTech companies to issue a payment card with its technology.
The partnership will enable FinTech companies “to launch and scale quickly within the UAE market”, said Omar Onsi, chief executive and founder of NymCard.
“With this new relationship, NymCard has dramatically reduced the cost and time it will take for FinTechs to go live in the UAE, with innovative payment cards that support their business models, leveraging our modern and open API-based infrastructure.”
Demand for digital payments and other FinTech services has grown during the pandemic as more people use online banking services to transfer money and pay for e-commerce transactions.
In the Middle East, the FinTech sector has been growing and by 2022, more than 800 FinTech companies operating in different segments such as payments, InsureTech and cyber security will raise more than $2 billion in venture capital funding to boost their growth, Mashreq said, citing data from the Middle East Institute.
Globally, digital payments are expected to grow to $8.26 trillion by 2024, from $4.4tn in 2020, according to Statista.
Mashreq swung to a net profit of Dh1bn ($278 million) in 2021 as impairments fell and net interest income and income from Islamic financing grew.
Impairment allowances during the period dropped about 39 per cent to Dh2.1bn, the bank said last month.