Payments platform Whizmo seeks to redefine financial inclusivity in the UAE

Generation Start-up: The Whizpay Technology digital mobile wallet is designed to democratise financial services, says the company

Eric Karobia, chief executive of Whizmo, says the digital mobile wallet can be used by 'a person, a business, or even multi-lane stores'. Photo: Whizmo

In 2020, Whizpay Technology was founded with the aim of addressing a persistent issue in the UAE: the reliance on cash in an increasingly digital world.

This challenge was personal to the company’s founders, rooted in their experiences of financial “frictions” and the exclusion faced by certain communities of foreign residents in accessing full-fledged banking services.

From this vision emerged Whizmo – a product of Whizpay Technology – which is designed to digitise cash, promote financial inclusivity and democratise financial services, Eric Karobia, the chief executive of Whizmo, says.

Certain communities in the UAE struggle to access bank accounts or lack the full functionality for digital transactions, says Mr Karobia. “And for those reasons, people resort to using cash,” he adds.

In 2020, a UAE Central Bank survey found that only 61 per cent of residents in the country, aged 15 years and above, had bank accounts, while 85 per cent used at least one formal financial service.

Globally, around 76 per cent of adults possess an account with a formal financial institution, such as a bank, credit union, microfinance institution, or mobile money service provider, according to a World Bank report from 2021.

What sets Whizmo apart from typical mobile money wallets is that it can operate independently of a bank account, says Mr Karobia. Customers can visit Whizmo’s partner cashpoints to add money to their wallet and immediately start using the platform, he adds.

While the platform is designed to work independently, it is also integrated with the broader financial ecosystem through a feature called virtual International Bank Account Number, which allows individuals to receive payments from bank accounts.

The application is designed to open accounts for both individuals and businesses, including micro, small, and medium enterprises, Mr Karobia says.

“A small Baqala grocery store or a barber shop probably do not have a digital way of receiving payment transactions, Whizmo comes and fills that gap,” he says. “We onboard them, provide a Whizmo for business account, and enable customers to pay digitally instead of using cash.”

The platform is not limited to MSMEs – it can also support large retailers, allowing Whizmo payments to be accepted at their stores.

“The way it's designed, it can be used for a person, a business, or even multi-lane stores,” says Mr Karobia.

Funding

So far, the company has been funded by its founders, but they anticipate seeking additional funding in the future to help grow and expand the business, Mr Karobia says.

“We still haven’t worked out to see what kind of funding we need … but so far, we are good at this stage,” he says.

Whizpay is the result of a collaboration between Saeed Al Otaiba, a board member of the Bin Otaiba Investment Group, and a team of technology and financial services experts. Mr Al Otaiba is Whizpay's chairman.

The Bin Otaiba Investment Group, a family-owned firm based in Abu Dhabi, owns a large and diversified portfolio, including 14 hotels around the world managed by hospitality companies such as Hilton, Hyatt, and Radisson, and several real estate assets.

Although the app is available on both the Play Store and the App Store, Whizmo has also been launched to a select group of friends and family for early testing and feedback.

“We are going through what you call a trial period … [and] we are able now to get a lot of insights into how our product is being received and fine tune it as we move on,” Mr Karobia says.

“We are also targeting some initial businesses that will give us insights into the model that we want to do for merchant payments and cash in/cash out.”

Revenue strategy

For individuals, Whizmo will have small transaction fees for personal transfers, cross-product transfers and money withdrawal.

On the business side, the platform will charge standard merchant service commission fees, where merchants pay a small amount when someone uses Whizmo to make a payment, along with fees for other specific services.

“Our charging model is based on a service. When you consume a service is the only time we charge,” Mr Karobia says. The platform will develop additional products tailored to different customer niches, which will also create new revenue opportunities, he adds.

Whizmo, which allows users to do cross-border transactions, has an eye on the massive remittance market in the UAE. “It will just be the typical way you send money back home, so that is a [service] we want to be sure that we can give to our users here,” Mr Karobia says.

The UAE ranks among the largest remittance markets globally, with the majority of funds being sent to India, Egypt, Pakistan, Bangladesh, and the Philippines.

The transaction value in the country's digital remittances market is projected to reach about $22 billion in 2029 from $19.17 billion this year, according to Statista.

Meanwhile, the UAE FinTech market is estimated to reach $3.16 billion this year and grow 12.56 per cent per annum to reach $5.71 billion by 2029, Mordor Intelligence said.

Revenue for the FinTech industry in the Middle East, North Africa and Pakistan is set to surge to between $3.5 billion and $4.5 billion by 2025, up from $1.5 billion in 2022, amid strong economic growth and a robust banking sector, global consultancy McKinsey said in a report last year.

The industry's share of financial services revenue could jump from less than 1 per cent to between 2 per cent and 2.5 per cent by 2025, the report said.

The Dubai International Financial Centre is the most popular choice for start-ups in the UAE, especially those in the financial services sector. Financial technology companies in the DIFC have raised a combined $3.3 billion in venture funding, with growth in line with the onshore financial hub’s goal of doubling its contribution to the emirate’s economy, the DIFC governor said in May.

FinTech was the fastest-growing sector for the DIFC last year, with Dubai's location allowing companies in the sector “unparalleled access” to a market of more than three billion people with an aggregate GDP exceeding $12 trillion, Essa Kazim said at the Dubai FinTech Summit.

Abu Dhabi-based Whizpay, however, holds a mainland licence, allowing it to have countrywide reach. The company also has a branch office in Dubai Silicon Oasis, a technology hub.

“We chose to go to the mainland because our view is that we wanted to create impact across the whole Emirates and the mainland licensing coming from the Central Bank of UAE gives us that ability,” Mr Karobia says.

UAE government regulations are “pretty straightforward” and allow the company to do “pretty much what we intend to do [in terms of a] business model or a business proposition”, he added.

Q&A with Eric Karobia, chief executive, Whizmo

Who is your role model?

My parents have truly made me reach where I am. They have inspired me to become a very good person. So, they have really been role models for me in terms of how to become a good person. From a professional perspective, I credit the people who have mentored me in my journey, who have shaped my career professionally.

What's your advice for new entrepreneurs trying to get into your sector?

I think what we've really learned as we go on is the importance of really understanding the problem statement. There's a lot of assumptions about the problem, and so we end up developing the wrong things. So, the advice for people coming into this space is that, yes, it looks very crowded. It seems like there are many people in the space, but there's always room for somebody who can clearly identify the market's problem and create something that is slightly different, while being able to play their part in impacting the socio-economic transformation that is needed in the UAE.

If you could do it all over again, what would you do differently?

I'll do it much faster. I think the market really needs a solution like this.

A start-up you wish you had founded?

The one that I think is genius is Starlink from Elon Musk. If you think about it, this is something that has completely broken-down geographical barriers, and the impact that it brings is unbelievable. When you consider the use cases that can come about because of the infrastructure that has been created, it is truly mind-boggling.

Company Profile:

Company Name: Whizpay Technology

Founder: Saeed Al Otaiba

Sector: FinTech

Date Started: 2020

Based in: Abu Dhabi and Dubai

Investment amount: Self-funded