Generation Start-up: Jaib capitalises on the region's cash-on-delivery mindset

Founders Fouad Jeryes and Sinan Taifour aim to bridge the gap between Mena customers and global merchants

Fouad Jeryes, the co-founder of Jaib. The company has handled over $800,000 worth of transactions since it launched earlier this year. Pawan Singh / The National

The idea was to build confidence among global merchants, streamline cross-border commerce and eliminate barriers that typically prevented the Middle East and North Africa region’s customers from buying foreign goods online.

On one side there was a huge underbanked population, deprived of services such as credit cards and loans, on the other were global merchants, usually wary of offering products in this region in the absence of any local partner.

So to bridge this gap between international merchants and local customers, business technologist Fouad Jeryes joined forces with his long-time friend and engineer Sinan Taifour to build a technology-driven financial system to map local payment, logistics and other service preferences on to international online shopping platforms, seamlessly merging local payments and logistics with global merchants.

Jaib, which means pocket in Arabic, was launched in January this year and so far has handled transactions worth $800,000.

“We had started our first start-up PayHyper in Jordan in early 2015 and that marked the beginning of our journey as we recognised the huge payments gap in the Mena region,” says Mr Jeryes, co-founder and business lead responsible for getting new business from emerging markets of Jaib.

Jaib enables customers to opt for smooth payment facilities that even allow them to postpone paying up to 14 days after placing the order. It has facilitated transactions on regional sites starting with its own CashBasha, a site started by the same founders to enable emerging market customers to shop on Amazon, eBay & AliExpress.

“Although the Mena region is a beautiful place you have a lot of borders between the countries and there are many problems when it comes to customs and cross-border transactions. If I am in Dubai and I have to sell a product to someone in Jordan then I have to worry about many things ... how I would collect the money, what are the customs regulations and who would ship into that country,” said Mr Jeryes.

A major reason many big merchants do not offer a cash payment facility in this region, is that in about 30 per cent of cases, customers refuse to pay once the products reach their doorstep, says Mr Jeryes.

“The Arab world is majorly a cash market but the problem is how do we allow people to purchase from global merchants through cash.”

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The success rate of Jaib’s system is impressive.

“In the last eight months of operations, Jaib has observed defaults of only $400, where transactions were failed. This is very low as per industry standards and that is why more people are trusting us now,” says Mr Jeryes.

Currently, Jaib is facilitating payments in Jordan and Saudi Arabia but the founders are looking forward to expand this facility in Kuwait, UAE, Oman and Qatar as they are gaining more experience.

“We have specifically succeeded in those markets where there were more problems. We are also looking forward to expand our ventures in Lebanon, Iraq and Palestine in the coming months.

The initial investors in Jaib’s mother company Alpha Apps were Aramex, the Dubai logistics company, and 500 Startups, a California venture fund. However, the founders are now looking to raise more capital.

“We have got convertible notes from them [Aramex and 500 Startups] during the early days of business in 2015 ... but they have not been converted yet,” says Mr Jeryes, who declined to disclose the exact amount of initial funding.

“Since then we haven’t raised any money. We made our venture profitable and started putting its profits in the business. However, now we are looking forward to raise money as we our eyeing expansion.”

In Mena, financial inclusion among women is a challenge, according to the World Bank. Today, 52 per cent of men but only 35 per cent of women have a bank account.

Comparatively high mobile phone ownership offers scope for expanding financial inclusion – among the unbanked, 86 per cent of men and 75 per cent of women have a mobile phone.

Jaib has merged machine learning in its cash collection mechanism to analyse risk by studying data related to customers’ shopping behaviour.

“Before a customer reaches the checkout page, we can detect whether he is genuine or not. So if he is genuine, we approve the transaction and give him 14 days to pay at zero per cent interest but we make an instant payment to the merchant from our pocket,” says Mr Jeryes.

“We take the risk and pay upfront to ensure the merchant is no longer at a risk of any default and to win his confidence.”

Jaib, which has a team of 13 professionals and two offices in Jordan and Dubai, is serving customers in their local language.

“We have built a scaleable model that integrates different payment modes and cross-border logistics. Currently we are aiming to maintain a month-on-month growth of up to 8 per cent,” says Mr Jeryes.

“In the next couple of years, our goal is to create a more financially inclusive market and enable an economy that allows seamlessness in commerce.”

The Mena FinTech market is worth $2 billion, according to a report by Mena Research Partners. Global investments in FinTech were about $31bn in 2017, but the Mena region attracted less than 5 per cent of that, says consultancy firm Accenture.

“Growth rates differ from one country to another ... markets are really different in the Arab world. When you look at US customers they have a common behaviour but in the Arab world we are not all the same,” says Mr Jeryes..

“Customers from Jordan will have totally different shopping behaviour than someone in the UAE.”

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Jaib’s co-founder and business lead Fouad Jeryes tells The National more about his FinTech venture:

How has your entrepreneurial journey been so far?

When you start a company it is a roller coaster ride. It really brings people together through hard times. We had a lot of ideas where I and my partner didn’t think the same as we are from different backgrounds but we knew we had a common goal to produce something that we were passionate about. It kept us going.

What was the proudest moment in your life as an entrepreneur?

Amazon’s chief executive Jeff Bezos visited our Jordan office with his team. We got a chance to hold a meeting with him in a pure-Amazon style, where you have something called a six-page narrative. We also have a photo of Mr Bezos holding our six-page proposal.

What is your immediate aim as an entrepreneur?

We are looking into the future of FinTech and e-commerce and we want to come up with more scaleable options of payments. Our immediate aim is to create immersive software and merge it with the physical infrastructure. We are also looking towards raising money because we have a lot of opportunities coming up that need a strong backup.

Are you open for mergers and acquisitions?

They are important for the next chapter of business but first you have to be comfortable with the current chapter. It is important for us to finish the first chapter before taking up other people’s agendas. Sometimes it could clip your wings.

How easy was it to meet initial targets?

On the very first day when we started our venture, we decided either we would get 60 orders in a month from people whom we didn’t know at all, without any marketing, or we would shut the business. Even if we had got 59, we would have closed the business. We strongly believe that the best types of products are those that grow on their own from word