Telr-Made Solutions for Region’s E-Commerce

Online payment company Telr is hoping to speed up the adoption of e-commerce in the region by offering merchants unique, tailor-made solutions.

By Dina Al-Wakeel

Sirish Kumar, the co-founder and CEO of online payment gateway Telr, said his company is working quickly to boost the number of online merchants in the region, and change the prevailing preference for cash on delivery (COD) amongst online shoppers.

Led by former Paypal, IBM, and WorldPay executives and employees, Telr currently offers its services and products to merchants in Dubai and Singapore. But Kumar believes e-commerce in the region is at an important inflection point, and his company will therefore soon be expanding into several other markets, including Saudi Arabia, Jordan, and Egypt.

Why did you decide to leave PayPal and set up your own online payment system?

During my time with PayPal, I concluded that the emerging markets were in need of good, effective local solutions to enable buyers and sellers to trade in local currencies. I think emerging markets, and particularly the Middle East, are on an inflection point. It is convergence of social media and mobile pay. If you look at the world average, mobile share of total Internet traffic is around 10 to 12 percent, but in countries like Saudi Arabia it’s around 18 percent. Social media penetration is the highest in the Middle East, with around 51 percent in the UAE, compared to a global average of 27 percent. Naturally, users, particularly the young, are figuring out ways to utilize these channels for e-commerce and we are seeing an increased number of users engaging in online transactions using popular channels like Facebook and Instagram as their store fronts. If you combine social media and mobile together, I think we are at another inflection point where these users will need innovative solutions to help manage their online transactions through social media.

Do you think that global companies like PayPal failed to tailor specific products for the region?

We will definitely see an increase of domestic e-commerce as a proportion of total e-commerce in the near future in this region, and that’s very good for everyone. I believe everyone who comes here has something to offer, and international expertise brings with it best practices, while local players bring the promise of developing innovative local solutions. For example, what we are doing is we bring in a lot of expertise in offering e-payment solutions to merchants with websites and those without websites, such as merchants that sell through social media. More importantly, we will also offer local solutions in the near future. For example, when a local merchant is selling to a local buyer, how can they use an online banking system without necessarily going through the international process of payments? These are the kind of scenarios Telr is working on solving, and I believe this gives us a competitive edge over traditional solution providers.

What else differentiates you from other companies?

First, we stand for enabling the merchant to draw on the local currency of their country. I believe this is not a feature offered by international e-payment companies. Second, we offer merchants analytics that help them understand how their business is actually doing. I can’t stress how important this value-adding feature is. Data-driven and accurate analysis of their performance is key to better and more accurately understand their positioning and improve. We also offer a one-stop solution where we provide merchants support on quickly developing shopping carts and logistics services. We’ve also recently signed a partnership agreement with MasterCard with an ambition to increase online transactions and incentivize sellers to do more transactions online instead of COD.

But international companies have been having a tough time trying to change the COD trends in the region. Do you think you’ll have more luck?

In the long-run, I believe the e-commerce ecosystem—both merchants and consumers—will benefit from dropping COD as a payment option. COD is not a great experience for consumers and has high cost impact to the merchants. To facilitate reduction of COD, we are continuously working towards fostering meaningful and strategic partnerships with both merchants and banks to help enable sellers to maximize their investments in the e-commerce sphere, for easier access to funds, and speeding up the on-boarding process.

Today in the Middle East region, domestic e-commerce contributes only around 10 percent of the total e-commerce activity, whereas in Southeast Asia domestic e-commerce is around 40 percent. I believe lack of trust in payment solutions is only one element that inhibits the growth of e-commerce. The absence of a comprehensive e-commerce ecosystem and the lack of domestic merchants are two other challenges that have contributed to slower growth in e-commerce in the past. Now the trends are showing much higher growth. The number of local e-merchants has increased by 25 and 30 percent in many parts of the Middle East.

So you think that people’s distrust in the security of online payments is not a major issue?

I will say that distrust in payment solutions is not the only issue. Companies, like Telr with experienced product and technical team, is a PCI DSS level one certified company. From Visa’s and MasterCard’s perspectives, we are equipped and capable of managing online transactions securely. Security and trust are of paramount importance to us. We also undergo regular audits with the PCI Security Standards Council to ensure all our systems meet and exceed global security standards.

How many institutional clients do you have and how many payments do you process?

We cannot disclose this information, however what I can say is that we have experienced double-digit month-on-month growth since we launched last year. One of our top priorities is expanding into new countries where we can add true value. Our ambition is to expand in around seven countries in the Middle East in the next 12 months. This will help merchants to open their business in different countries and take advantage of the corridor.

In some countries, governments are rising up to the occasion and realizing that e-commerce results in entrepreneurship and contributes towards the growth of e-commerce and GDP, like the UAE and Saudi Arabia. In Saudi Arabia, if you want to set up your online business it takes a few days, while it takes 9 to 15 weeks in other parts of the Middle East.

Besides your expansion plans, what else are you lining up for the future and how do you foresee the future of e-commerce in the region?

We are committed to working hand in hand with our merchants to provide them with all the necessary tools to grow their consumer base without the need for them to invest too much into their technical infrastructure. Our success is derived from theirs, so we will continue to provide all the necessary support to help them grow.