Sirish Kumar, during the Ecommerce Show 2015, at the Dubai International Exhibition and Conference Center

The Middle East is at an inflection point as more and more shoppers buy online via social media platforms and mobile devices, yet merchants don’t have the options to properly handle them.

According to Smart Insights, mobile traffic is driving more than 20 percent of internet purchases in the MENA region, thanks to smartphone penetration of 89 percent and social media penetration of 27 percent.

But SME merchants in Asian and MENA emerging markets suffer from a lack of epayment solutions tailored to serve their needs. Many markets require online merchants to place deposits from $5000 to $50,000 before they even make their first online transaction.

This is what pushed Sirish Kumar to co-found Telr, a payment gateway that allows merchants to accept and manage online payments via web, mobile and, crucially, social media.

After holding leadership positions in Motorola, Nokia, Cargill and most recently at PayPal as CFO for Southeast Asia, Kumar is now CEO of Telr, and providing a way for SME merchants to deal with multiple currencies from buyers and draw cash in their own currency.

Wamda: What are you doing to make merchants’ lives easier?

Sirish Kumar: We are focused on raising awareness on the benefits of going online, especially for SME merchants and entrepreneurs. Merchants don’t need to have websites to sell online anymore, with platforms like Facebook and Instagram making it easier than ever to engage in ecommerce. We are one of the few payment companies in the world that have a Payment Card Industry Level 1 compliance certification. Additionally, our merchants can transact in local currency directly (without any intermediary FX processes). This is a big relief to merchants from any size.

Partnerships in this ecosystem are not to be taken lightly, especially with banks.

Wamda: What is the value behind your latest partnership with the Arab Bank?

Kumar: As per this partnership, we are now responsible for onboarding merchants on to Arab Bank’s emerchants programme. That includes due-diligence, integration and ongoing support and risk management. What this means is:

·   One of the most established and trusted banks in the region is now an integral part of this ecosystem. We believe competition is good, and providing merchants with more choices will only stimulate the ecommerce economy and push us all to innovate.

·   We are now able to cut the standard onboarding time (9 – 15 weeks) by 90 percent - meaning entrepreneurs, startups and SMEs don’t need to be stuck in paperwork limbo.

·   Waiving the ridiculously high security deposits charged by some banks for e-merchants (between $5,000 – $50,000, and that’s before they even make their first transaction). This is especially important for startups and SMEs who need access to as much cashflow as possible. This will allow them to focus resources on developing their product and user experience instead of having to put valuable funds away.

·   A flexible and competitive fees structure that is among the lowest in the region

In this particular region, we have a responsibility to build an environment that encourages innovative startups and existing companies to go online and become part of the booming ecommerce sector, but many found it challenging with all the restrictions and red tape surrounding the process of launching an e-business.

Wamda: What efforts have you made to work around or lobby to change the bank regulations in this region?

Kumar: We want to work in close coordination with regulators, banks, web-store builders… We will waive upfront costs that merchants had to pay to banks before their first online transaction, and we will roll out simple pricing and every merchant will be given access to all the features and facilities they need to grow their business. We are committed to reducing the onboarding time for merchants from 15 weeks to less than two weeks in the coming months.

Wamda: Are you considering launching operations with ceilings on transaction size or withdrawals to work around central banks’ regulations and AML (anti money laundering) laws in the region? 

Kumar: We have been working with banks and providers such as MasterCard and Visa to enable merchants to onboard faster without compromising on AML and other card rules. We are committed to explore all such options that enable merchants to start their online business within the compliance framework of local, regional and global regulations or scheme regulations.

Wamda: Based on your experience with PayPal, and now with Telr, where do you think the biggest efforts should be invested to have the region open up more to online payments? Can you site three bottlenecks?

Kumar: Higher growth of local ecommerce can only happen once more entrepreneurs sell online.

Merchants usually have to suffer up to 15 weeks of waiting to get onboarded to start their first online transaction. They have to place security deposits, pay set up fees and other upfront costs before they have sold a single product. For the Middle East to grow at 40 percent year-on-year by 2020, we would need payment solutions like ours to provide one stop solutions for web store development, logistics and analytics. This will help merchants focus on their business. We would like debit cards to be e-enabled. Countries like India saw a huge growth once debit cards and online banking were e-enabled for buyers to use the same as a funding source.

Wamda: What are your thoughts on cash on delivery (COD)? Can it be playing more of a positive role than a negative one to help raise awareness around ecommerce?

Kumar: COD forms a major part of completing transactions that originated on merchants’ website or social media platform such as Facebook. Cash continues to be the ecosystem’s biggest competitor. However regulators and banks are positively changing direction in the MENA region with entities like SADAD in KSA making a great push to encourage online business by offering online banking as a funding source to buyers.

Wamda: What are three tips you give young entrepreneurs looking to launch an online store?

·  Kumar: Choose the right partners. I cannot stress this enough. Banks, logistics and payment partners can grow or stifle your business. Take as much time as you need to match your needs with what is on offer and make sure to choose partners that can meet or exceed these needs.

We all want to work with the biggest names possible, but that’s not necessarily the best option for you.

·   Don’t be afraid to experiment and fail. You have all the tools and facilities to kick start your online business. The internet provides you with countless opportunities, accessing consumers across many countries and reducing incremental costs for incremental revenues to your business. Consumer habits are changing and trust for doing business online is on the rise.

So do not worry to go online. If you look at some of world’s biggest online businesses, they were built on previous ventures that have failed or had to evolve to remain in business.

Netflix comes to mind. What these guys have done was phenomenal. Looking back, I remember a time where they were ridiculed for their DVD rental model, but they’ve successfully turned that around and are now an entertainment juggernaut.

·   Be super passionate about your vision. Get smarter people in your team and you will see the multiplier effect it has on your execution capabilities.