Mobile phones in emerging markets are still widely used for texting, making phone calls, taking pictures, reading news, and using social networks, but countries like Kenya are also using them as a method of payment.

M-Pesa in Kenya is a mobile payment and transaction service that was launched in 2007, and, as Wamda has previously reported, it’s now used by 70% of Kenyan adults in the country. Operating through Vodafone, it allows users to send money, pay their bills, recharge their prepaid cards, and withdraw money from other digital wallets or bank accounts. Due to its reliance on text messaging to send verification codes to complete transactions rather than the internet, the service has gained huge popularity. Now, around 20% of the country’s GDP goes through M-Pesa.

Arab countries are now getting their share of the cake with ever more mobile payment and banking apps and services cropping up. In 2012, PayPal partnered with Aramex to launch its operations in the Middle East. In the same year, mobile payment company MOBIbucks also partnered with Middle East Payment Services to bring the service to Lebanon, Jordan, Iraq, and the UAE. Last year, McDonald’s in Kuwait partnered with mobile payment app SEQR to allow customers to pay using their mobile phones.  

Lebanon gets a new mobile payment app 

Back in 2011, the Lebanese market also saw the launch of its first mobile payment app, PinPay. The mobile payment app, which is available on iOS, Android, Windows, and BlackBerry, offers a variety of services to its users. The service, which operates under the slogan of “Pay Anywhere, Anyone, Anytime”, has established itself as the leader of its industry in Lebanon.

Registering for the service can be done online or at any one of PinPay’s partner banks – Bank Audi and Bank Med. After downloading the app from the app store, users need to activate the service by either filling out an online form (they would then have to wait for the contract to be delivered to them) or by visiting any PinPay partner bank. Users must have a bank account at one of these two banks so they can link it to the app. Once activated, the user can then perform a number of different payments and financial activities including: sending money from their bank account to another PinPay user, paying their phone and internet bills, recharging their mobile line, paying their parking fines, donating money to listed charities, purchasing a wide range of subscription and online services, and so on.

On a phone call with Wamda, PinPay’s CEO, Omar Bader, spoke about how the startup has evolved over time. “PinPay started in 2011 with Bank Audi, then Bank Med joined in the beginning of 2013,” says Bader. PinPay didn’t start as a mobile payment app; during its early days, the startup’s initial initiative was to develop an online banking app for Bank Audi that would allow users to check their account balance, request a mini-statement, and perform money transfers from one Audi account to another. “PinPay started under the Bank Audi license, and it took a year to obtain its own independent license from the Central Bank,” Bader says. It was then that PinPay decided to launch a separate app specifically for mobile payments. The original Bank Audi app can be downloaded separately.

New direction

Having previously taken investments from MEVP, Bank Audi, and Bank Med, PinPay is now slightly changing direction in order to offer a service that’s accessible to everyone, including those who are not PinPay members. Since joining the company in July 2013, Bader has already executed the plan and PinPay’s services will soon be found at local partner banks and ATMs. PinPay has “a couple more banks in the pipeline… we’re hoping that their partnership will be official before year’s end,” he says. This will not only give the startup more exposure, but it will also help it overcome the challenges that the company is facing, including user awareness and acceptance of mobile payment. “Mobile is our primary channel but it has challenges. Some users trust the bank’s channels more,” he admits, “banks have a wider reach.”

Bader also expressed interest in a niche e-commerce segment: online food delivery. In the coming months, PinPay will partner with food ordering websites that don’t offer a payment option to integrate its services on their platform. In the words of Bader, users can order online, put their phone number on the website’s payment page, and wait for a code that will be delivered by SMS. This code will then be entered on the site to complete the payment and users won’t have to use the app. “We don’t want to provide an alternative payment for e-commerce but we want to offer one for websites that don’t have any payment method.”

With 26 employees on board, PinPay’s office is located in Beirut Digital District, a digital hub for accelerators, incubators, startups and companies. In order to generate income, the startup takes a fixed transaction fee of one to two dollars and splits it with the provider. “Sometimes it’s for free [transaction], it depends on the provider,” says the CEO. In addition to that, PinPay charges a fixed subscription fee of one to two dollars a month from its app users. “We’re currently exploring the option of offering the service completely free of charge to our users in the coming year.”

So far, according to Bader, PinPay has a total of 55,000 users, and 40,000 of them are regularly active.

Kicking off a new trend

PinPay has paved the way for other services grow:

• Tap2Pay: A Near Field Communication (NFC) mobile service launched by Bank Audi in April 2014 in the region, including Lebanon. After connecting to an Audi MasterCard credit card, the service will allow users to wave their smartphone in front of a contactless reader, allowing the credit card information to be transmitted through the antenna of the smartphone through the NFC technology to the reader in seconds.

• Simba: A mobile app that was launched by Fransabank and Viamobile, a mobile payment provider in Lebanon. The app allows users to send and receive money, recharge prepaid mobile lines or someone else’s by outing their mobile number, recharge internet cards, pay parking meter fines, check account balance, and request a checkbook.

• CSC Group: A Lebanese financial institution regulated by the Central Bank, where Bader worked for nearly nine years as CIO. The group has a mobile payment option which supports transfers, money withdrawal, payment to merchants, and other features.