Headline, October14, 2013

!!! ^^^ THE VIRTUAL SPRING'S 

FIRST

 ARAB BREEZE ^^^ !!!

Just a few years ago Wahid Essale's friends in Saudi Arabia started to use Online shopping sites. But when it cam to buying, they would ask him for his credit card.

''I'd pay for the goods and they gave me back the cash, plus a small commission,'' he explains. By 2007 Wahid Essale had the turned the favor into a business: Cashna, an electronic wallet which allows users to store funds online and spend them on e-commerce sites.

Cashna is only one of a slew of new payment services that in the Middle East. CashU, the region's most popular e-wallet, handles payments for the like of Skype. OneCard, another e-wallet, can be topped in many ways.

The bloom of such services in the result of a mismatch of demand and supply. Thanks to the spread of Internet connections and Smartphones in the Middle East, consumers are increasingly eager to shop and play online. 

Yet most of the regions 370 million people use only cash. And even when they have credit cards they seldom trust merchants with their payment details.

Governments around the Gulf first tried to change this by launching systems that link buyers and billers. Saudi Arabia's SADAD, for instance. allows the Kingdom's citizens to make payments to local companies. 

But such services have not been keen to include online gaming services and shopping sites, as well as foreign companies. And they have limited use in countries like Egypt where, according to some estimates, as little as 5% of the population have bank account.    

In theory that leaves plenty of room for private payment services to bridge the gap. In practice they have lots of obstacles to surmount. Concerns about money laundering and financing of terrorist networks means new payment providers not only have to deal with usual red tape but also cope with layers of additional regulation.

Lack of regulation is the problem for mobile payments, which would be particularly suitable for the region's unbanked masses with mobile phones. Without  a legal framework, telecom companies find it hard to sign deals with payment services.

And then there is pricing. Some payment providers charge hefty fees, arguing that this is the only way to make the economics work given few subscribers and low-value transactions. OneCard, for instance, takes 7 to 10% from retailers also charges customers for topping up with prepaid cards. 

The firm's management is coy about its revenues, but it is the leading payment service for the region's gaming industry, worth an estimated $100m.

Easier, cheaper online payment services will boost e-commerce in the Middle East. But other things have also to improve. Cross-border logistics are often a nightmare, taxes are high and, perhaps most important, the local e-tailers leaves much to be desired. 

The region's e-commerce is bound to come; Digital payment services are multipying in the Middle East. And  this for sure is the first breeze,   but it may take some time.

With respectful dedication to E-commerce the world over. See Ya all on the World Students Society Computers-Internet-Wireless:

^^^ !WOW! : Shapes Up ^^^

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless