In the wake of Qatar National Bank’s (QNB’s) new partnership with PayPal, we discussed the security benefits of the online money transfer service, how online spending is on the rise in the region, and why businesses should take the step into the market with Managing Director for PayPal Middle East and North Africa, Elias Ghanem.
E-commerce is still in its infancy in Qatar and the Middle East. However, going where no banking institution has gone before, Qatar National Bank (QNB) recently launched a partnership with global e-commerce business PayPal in order to make online payments for goods and services effortless and much more secure.
Until now, it has only been possible to make online purchases with credit cards, however, new features are now available to QNB customers through their online banking website which make it possible to pay with debit cards and bank account top-ups.
Building trust between consumers and merchants can be a slow, methodical process. PayPal’s reputation and success as a faster, safer way to pay and get paid online is indisputable. With 128 million active accounts in 193 markets and 25 currencies around the world, PayPal enables global commerce, processing more than 7.6 million payments every day. Those kind of figures should go a long way to acquiring trust throughout the region.
“There are very few merchants in Qatar and the MENA region that are online and accept PayPal,” Mr Ghanem noted. “We believe that by enabling the PayPal option there will be more growth in business for merchants. The entire MENA region has an unemployment problem and especially high youth unemployment. E-commerce entrepreneurship is what is important for this region to enable young people to try their ideas online.
“However, logistics and shipping is the largest problem we encounter. One problem is related to trust and the other is related to delivery. Today, cash on delivery is 80 percent of the regional e-commerce for a simple reason: lack of trust. Buyers don’t trust merchants. The problem is you have to be at home and you have to have cash. PayPal has a buyer protection program that means if the goods are not delivered to your house or if what you receive is not what you asked for, Paypal will pay you back. So now we’ve added the trust factor.
“Getting goods delivered to the correct address can also be a pain point in this part of the world. PayPal has made a partnership with Aramex, and specifically their shop and ship program. So now, as a buyer, you can have an address in the US, the UK, Turkey, and so on. Now you can get your goods delivered to this external address and Aramex will then deliver it to your house.”
When it comes to e-commerce in Qatar it is very difficult to find numbers to support a view. What we do know is that in 2011 online spending went from USD 300 million to USD 600 million in 2012 in the Middle East. That’s already double, which is fantastic. And the signs show that the region will reach USD 1.1 billion by 2015.
Compared to other parts of Asia, Europe, and the US, those figures seem low. There are hindrances to e-commerce growth which need to be resolved and PayPal’s entrance into the market in Qatar and other Arab nations will do much to provide solutions.
“The main challenges we face are in the areas of payments, merchants’ offerings, and logistics,” Mr Ghanem explains.
“In Qatar and the region it is currently all about credit card payments online, and very little of anything else. The partnership between PayPal and QNB enables more payment options online. Thanks to the partnership, a person can now link a credit card, a debit card, or a bank top-up to a payment.
“Not all of us have the same behavior towards payments online. Some people have no problem or concern about using their credit card, others would prefer to use their debit card, and then there are those who want to control it, and that is why a bank account top-up is the solution.
“The new payment options will help grow the consumer spending online. Today, when you take your Qatari credit card and you try to buy online from a merchant outside the country, in most of the cases the transaction is declined for whatever reason. But by linking it to a PayPal account it’s a PayPal transaction. And if the merchant trusts PayPal then the transaction will be successful.”
If there is an obstacle around every corner it seems that PayPal and their newest partners have a solution. Only one more quandary remains in the mix for what could potentially be the perfect recipe to success.
“Once we have solved all of these aforementioned challenges and we add to this a layer of education, e-commerce will grow steadily,” Mr Ghanem added. “Every stakeholder in this industry is trying to push consumer and merchant education, and I think ICT organizations have a big role to play here.
“For SMEs, I would say to them don’t wait to get online with your product or service. If you think you have a cool idea then it probably is a cool idea. Failing is not a problem. In our regional culture failing is bad. If you come from Europe or the US it has become part of learning in business. It’s vital to create the best customer experience. You are competing with so many other options for the consumer. The consumer is not here to understand what you do, you are here to explain to the consumer what to do. And finally, have the payment solutions for what the consumer is looking for and be aware of the consumer mindset. This is the advice I have for those who are considering placing their goods or services online.”