Set up to deliver electronic payment services to banks, retailers, governments, and the general public, EMP is now working to turn Jordan into a cash-free society.
Changing any society’s habits takes time. Encouraging consumers to switch from using cash and paper transactions to e-payments is a good example of this, particularly in Jordan.
The Emerging Markets Payments Group (EMP), a leading electronic payments processing company in the Middle East and Africa, was established with the aim to help accelerate the shift and make it as seamless as possible.
EMP Jordan CEO Hassan Mayassi said although a significant number of Jordanians are still reluctant to embrace the shift, significant strides have been made over the past few years to encourage change.
The company has teamed up with MadfooatCom and the Central bank of Jordan to set up eFawateerCom which allows users to settle bills online. It’s further working to develop more e-payments and digital wallet systems, and even portable card readers for home deliveries, to help the Kingdom embrace the new technologies.
How do you see the e-payments market in Jordan in general?
For us it is not an easy market and is riddled with challenges. First of all we have a 70 percent unbanked population, which means we depend on 30 percent who are the high spenders that use electronic cards. This is where the role of payment companies comes in; we work hard to educate people and see what we can add to the market to enhance the acceptance and move the society from cash-based to cashless. We understand the cost of managing the cash, on average worldwide at about 2.5 percent, so actually turning to cashless is much more convenient and affordable for the retailers. This is where we see a lot of potential and that’s why we have invested millions of dollars. We invest around $4 million each year in the company’s IT section, including the improvement of the IT infrastructure and adding new services, like the electronic bill payment eFawateerCom, e-commerce, and mobile payment. Our Company covers all elements of the payments value chain, from issuing, acquiring and switching, through to card procurement and personalization, in addition offering a full range of e-government solutions using major channels, of card, mobile and the Internet.
Why did you decide to invest in eFawateerCom and has it paid off?
It is a joint venture between EMP and MadfooatCom under the umbrella of the Central Bank of Jordan. Two years ago, the two companies took part in the tender that was issued by the Central Bank and we actually won it. Our role, at EMP, is mainly to bring not only a world-class system that will manage electronic bill presentment and payment in the country, but also to provide the ability to integrate the system into EMP’s extensive payments network in Jordan to create a seamless experience for consumers.
It hasn’t paid back yet as it needs time and lots of effort from all the stakeholders. I know the Central Bank is actually playing a big role here, same goes for MadfooatCom. But it also depends on the billers themselves, the government and how hard they push for this service. We’ve been to some of the government’s utility payments, and the staff still don’t know what eFawateerCom is. So it requires spreading awareness and that’s why I’m saying it requires time, in fact in April we will witness full-fledged advertisements that will assist in achieving this goal.
With eFawateerCom, users can either pay at a bank or online, they can also go to retailers to pay bills. We are starting with Safeway, later on it will be available at any interested retailer where users can go and pay electricity or water bills there. That will increase their foot traffic and benefit the merchants.
How do you rate the success of eFawateerCom?
I can say it is a success but people need to know more about it. We are witnessing month-on-month growth since the launch in 2014 when 16,000 bills were paid through the service, while in 2015 more than 500,000 bills were paid since electricity was added in the second quarter. Luckily in the first two months of this year 188,000 bills were successfully transacted through the system. Taking “SADAD” in Saudi Arabia for example, it took them five years to reach 95 percent of their acceptance bills through Sadad. In our case we’ve only started about a year ago, but the growth has been tremendous. In Jordan, it’s not more than 10 percent now and it still requires lots of effort.
Do you think the government has been doing enough to advertise this service?
They have big plans now to advertise the service. A huge chunk of budget allocated for ads on the first of April. They first wanted to ensure that the system was working well, the people and the billers understand it and for the latter to believe that the clients don’t need to go to them to pay. Now people can pay their water and electricity bills, even school tuition and make charity donations. There are also some new companies who are interested in adopting this service to collect their monthly subscriptions.
Why do you think Jordanians in general are under-banked? Is it due to a lack of faith in the banking system?
People trust banks here, and some even turn to Islamic banks. But I think it mainly has to do with the culture. It’s a legacy and they got used to it. Some retailers and big stores refuse to put a point-of-sale machine; they want to collect cash money as they trust cash more.
I’ve been after one large retailer for the past four years to convince them to add a point-of-sale machine, and they keep replying that they are fine with stashing their cash [under the mattress]. I believe that as long as they don’t see the risk of managing large amount of cash, this trend will continue. But it is our role to step in and convince them that people who use cash actually spend less than those holding cards. According to statistics, the average transaction size of people using cards is JD71 compared to people who use cash with an average transaction size of JD40. If you have JD50 in your pocket, you will only spend those JD50, but if you have a credit card you will spend more; it is harder to control yourself in this scenario.
What have you been doing to alter the people and the retailers’ opinion about using cash?
We have been doing a lot. We’ve introduced a loyalty program for cardholders called (EMPlus). It capitalizes on the idea of “one card, one swipe.” Merchants are not required to issue their own loyalty cards and cardholders are not required to hold multiple loyalty cards. The same bank payment card will act as the loyalty card for several merchants, which we have recruited. EMP POS recognizes the eligible cards and immediately grants the cardholder substantial benefits like instant discount, electronic coupons, or free gifts to benefit from the recruited merchants. It’s a very good program that was launched last year, and we will put more effort into it to make it premium in the Kingdom.
We introduced Mr Cardy a couple of years ago, and it will be back. We have been busy developing and marketing other products, but this year we will focus more on Mr Cardy. There are acceptance campaigns that we have carried out with retailers.
This year we also have a big surprise for the Jordanian market, we are going to see a usage campaign for two months starting mid May, under which the more you spend using your card on EMP terminals, the bigger your chance is to win prizes. It is going to be a huge campaign. This campaign will encourage people to use cards more often. We are also introducing mobile payments technologies, and our main target in these technologies are the youth; the younger generation who are always on their smartphones. Mobile penetration is very high in Jordan at 147 percent and we have 13 million active mobile subscribers. Youth are already using their smartphones for downloading and paying for iTunes as an example. That’s why we decided to come up with a payment mechanism using the mobile.
We built a consortium between four banks: Cairo Amman Bank, Etihad Bank, Bank of Jordan, and AJIB, and one telecom operator which is Umniah, and we named this consortium Al Hulool. Users can create a wallet on their mobiles, which they can deposit money into and spend them at any retailer. As a user you don’t even need a card. The product is now live through Umniah as a super-agent offering unbanked mobile payment wallets, which was named Mahfazti. Therefore, if my daughter was in Taj Mall and she wants to watch a movie but has no money, I can easily transfer the money from my wallet to hers while sitting in my office.
It’s very easy and simple. Right now you can top the wallet up through Umniah and its agents, but in the near future we will expand the agents network to include exchange houses, post office, and many others, including through eFawateerCom. For instance paying for taxis using this method instead of cash, the taxi driver can either spend the money or go to any ATM, put in his pin number, and withdraw the cash. Expats can also benefit from our international remittance service by sending money to their families back home, allowing them to cash out through their banks’ channels. This is where we will focus on the unbanked; it’s a chance for the banks to convert these clients to bank customers. People and retailers need to see the benefit.
It’s a totally new thing, and for it to go viral we will need at least two to three years. Banks will connect very soon to serve their clients base, even NGOs will soon start loading the beneficiaries’ wallets through Mobile Payments.
When do you see a real change in the Jordanian society when it comes to shifting from a cash-based society into a cashless one?
We are seeing the change, and we are working on it to make the shift faster. The card to cash percentage used to be 3.5 percent, today it is almost 5.5. We will be grateful if we reach 10 to 15 percent. With the new technologies and payment mechanism that we are introducing to the market and users, I think we will get there soon.
This year will witness a lot of new changes. Once we introduce the mobile payment, it’s going to be different. An evidence of that; one of the banks approached a local university to turn the student’s ID cards into a prepaid smart card with a payment application, where students can even pay their tuition fees using the cards instead of having to use cash.
In the end I need to capture the youth, if 70 percent of our population is less than 30, then this segment is what I need to focus on. Just imagine you are tapping your mobile or watch to pay and go, we’ve seen this happening in other countries so why not here? Imagine if I create something fancy for the students.
We have also introduced the new point-of-sale machines with the contactless reader. It’s a huge investment. We are replacing all the existing ones with the new terminals that have a built-in contactless reader, so the minute I come with my mobile I can tap and go. It is a feature the older machines didn’t have. We are also introducing a new solution called multi-lane integration solution for department stores like Carrefour; a flexible, robust, and secured platform for processing card transactions. This will allow their staff to spend more time with the customers instead of being occupied by the transaction handling procedures. So there are lots of new technologies to make the life of retailers easier. We are even introducing small devices (mPOS) that can be used for home deliveries, and we will be starting this pilot with Americana.
We’ve invested in a payment gateway for e-commerce service through a company called MIGS, acquired by MasterCard and we are using their services. EMP’s e-commerce solution allows merchants to accept online payments through its secured payment gateways.
How has your business developed since you’ve started in Jordan?
I’ve been here for four years and we’ve tripled our numbers in terms of volumes. We’ve introduced many new services, the market has experimented with them, and we are still investing in two main fields; technology and market education. As for our number of staff, we started with 65 and today we are 129. This number is still growing to serve the market and its needs.
Even the market changed 180 degrees. There’s more awareness today. We are changing the mindset, today your ATM cards can be used at the point-of-sale machine instead of going to withdraw the money and then going to the supermarket.
There are other segments within the market that we haven’t penetrated yet, like introducing the machines to the medical sector for instance.
What are your future plans for the Jordanian market?
We consider the development of electronic payments and the gradual trend towards a cashless society to be of central importance to the Jordanian economy. As the leading provider of high quality, innovative, and flexible electronic and card payment solutions we will continue to provide world-class services to banks, retailers, and government. Our aim is to develop e-payment technologies and we want to reach to at least 15 percent cashless society, but to achieve that we need to deepen the awareness and understanding of the e-payments industry by conducting payment acceptance conferences introducing state-of-the-art solutions and even building excitement and loyalty at the cardholders end.