India’s payment firm PayMate looks to expand across the GCC by 2021

The digital payments solution company will begin UAE operations in January 2020

Ajay Adiseshann, founder and chief executive of PayMate, aims to expand business in all GCC countries and some parts of North Africa by 2021. Courtesy PayMate

India's digital payments company PayMate will invest $3 million (Dh11.02m) in its Middle East operations with the aim of expanding across the Arabian Gulf by 2021, its chief executive said.

PayMate, which set up a Dubai office in June this year, will start to serve clients in the region from January 2020, beginning with the UAE.

"The investment will be made in the next 18 to 24 months in hiring new talent, data localisation and developing customised business solutions for this region," Ajay Adiseshann, who founded the company in Mumbai in 2006, told The National.

This is the first global push for the company that raised nearly $25m from investors such as Recruit Strategic Partners, Brand Capital, Mayfair 101 and Visa in July.

“We will go live with six-to-seven big customers in the UAE that might also have cross-border requirements across the GCC,” Mr Adiseshann said.

Saudi Arabia is the next market on the radar for PayMate, which plans to enter the biggest Arab economy next year.

“Owing to its size, the kingdom holds even more potential than the UAE. In the next couple of years, we will be present in all GCC countries and in some pockets of North Africa as well,” he added.

PayMate is working with banks issuing Visa commercial cards to facilitate credit for both payables and receivables across supply chains, moving traditional cash, cheques and electronic funds transfer payments onto cards.

Industry analysts predict a rise in payment cards in the coming years as consumers make a transition from cash to credit and debit cards. The number of payment cards in the Middle East and Africa will rise to 910 million by the end of 2021, from 611 million in 2015, according to London-based research company RBR.

Mr Adiseshann said expansion in the Gulf is the first phase of major growth for PayMate, which ultimately plans to expand globally – a goal set when the company raised more capital in July.

“Our last quarter was cash-positive … now we will be investing in global expansion but again we will be cash positive in the next six-to-eight months,” he added, without disclosing numbers.

“In the next couple of years, we expect the Middle East region to contribute up to 35 per cent to our overall revenues.”

PayMate, which uses Microsoft's .net software framework, was India's first digital payments provider that allowed consumers to pay for online and retail purchases using mobile phones.

It currently processes transactions worth more than $5 billion annually on its platform and plans to hit $8bn to $10bn by the end of India's financial year in March.

For its operation in the Gulf, PayMate is relying on its partnership with global payments technology company Visa and tie-ups with several local banks including Emirates NBD, Dubai's largest lender by assets.

“Visa already has [local] banks as partners and now they will use the PayMate platform… payments will be done on Visa commercial cards,” said Mr Adiseshann.

In the GCC, the company is focused on industries such as hospitality, fast-moving consumer goods, retail and government entities.

While it strengthens its presence in the Gulf, PayMate is also on the lookout to capaitalise on opportunities that arise from the credit crisis in its home market of India, Asia's third-largest economy.

“There is a yawning gap of credit in India, nearly $300bn and banks alone cannot fill that,” said Mr Adiseshann.

“We see it as an opportunity to control payment flows, enhance digitisation and on the back of this huge data, provide credit to both large and small businesses.”

PayMate extends financing facilities, which could range from between 500,000 Indian rupees (Dh26,316) and 2.5m rupees.

Earlier this month, Moody’s Investors Service reduced its 2018-19 fiscal year economic growth projections for India to 4.9 per cent from 5.8 per cent.

The credit crunch among non-bank financial institutions, which have been major providers of retail loans, has exacerbated the slowdown, according to the credit rating agency.