Having set about transforming the way Jordanians pay their bills via its e-Fawateer platform, online payment company MadfooatCom now has its sights set on regional expansion.

By Rebecca Irvine

When Nasser Saleh returned to Jordan after several years of working abroad, one of the first things that struck him about his home country was the continued dominance of cash payments. Having lived in the United States and then Saudi Arabia—where the government’s SADAD e-payment system is widely used—he was aware of how much easier online payment options can make your life. It was the desire to bring this industry to Jordan that inspired him to establish MadfooatCom, the company that created and runs the Central Bank of Jordan’s e-payment platform, e-Fawateer.

“I came back to Amman in 2008, and faced an issue paying my first electricity bill—it was really horrible,” Saleh explained. Upon encountering numerous queues and insistence of cash payments, he was inspired with the idea to establish his own e-payment platform for Jordan. At this time though, with a lack of funding readily available, Saleh wasn’t sure where to start, leaving the idea untouched for a number of years.

Eventually he created MadfooatCom, whose service e-Fawateer connects individuals to billers (such as utilities, telecommunications, and government departments) through their online bank account. From their bank account, users can then select from a list of billers they wish to pay, and send the money directly and immediately. MadfooatCom takes their commission from the biller rather than the user, making the system free to use. The only exception is payments directly to the government, such as fines, where government regulations stipulate that the money has to be taken from the user.

Saleh said e-Fawateer in now racking up 3,000 transactions daily, and he aims to increase this 10-fold over the coming year.

Finding an Impetus

But it hasn’t been the easiest of rides to get to this point. Not only did Saleh face the usual challenges of establishing a startup, he had to convince banks and billers that they should connect to a new and unknown system.

By chance, he received an email from Oasis500 advertising their training for people who want to start a business. This training and the subsequent inclusion in Oasis500’s program gave Saleh the impetus and means he needed to make his idea a reality. “From 2008 I had an idea and I could not start until I found Oasis. If you don’t have such organizations or initiatives, I might still now be looking for somebody to help me,” he said.

He decided to take the plunge and quit his stable and well-paid job with USAID in order to dedicate his time to MadfooatCom. The company grew steadily, with a prototype built, a small team hired, and angel investors on board through the Oasis network. The growth was slower than he wanted though, with only two banks and one biller adopting the service after the first two years.

It was at this point that Saleh decided to take a risk, and try to get the Central Bank of Jordan on board. It was the sink or swim moment for the company. “Either they will be convinced, then they can convince all banks because they manage them all, or I will just shut down the business,” he said, explaining his reasoning behind the decision. Luckily for Saleh, the governor and management of the bank were open to new ideas. The bank issued a tender for the creation of an e-payment service and, after a carefully prepared pitch, MadfooatCom were able to successfully win the contract in 2014.

The service administered through the bank was branded e-Fawateer. It was developed from scratch by MadfooatCom, and modeled on the Saudi SADAD system. This was the turning point for the business. With the backing of the Central Bank, billers and banks started to take notice of the company, which is now connected to 23 banks. “We are building the network, and it is becoming easier to bring even more billers and merchants on board,” Saleh said. Having full control of the software they use is also invaluable, and provides them with the opportunities to deploy it where they see fit. “We own the IP … and manage the software from A to Z. That gives us the ability to expand,” he said.

The company has also benefited from the mentorship offered by the Endeavor network—an organization that supports high-impact businesses through their growth stages, which Saleh was selected to join in late 2014. The support the business has gained from this and, earlier in its life, Oasis500 is something that Saleh values immensely. “You know a rocket—you can say that Oasis is the first push that you need—the seed fund, the mentors, and the angel investors network were very useful … Now for us [as we grow] it’s mainly Endeavor,” he explained.

As a result, the business has begun to grow rapidly, and now has 12 investors. In addition to angel investors, Oasis500, and Saleh himself, three banks and two other companies hold a stake. This has allowed expansion to take place relatively fast, something Saleh is looking to capitalize on. “We went from a small company of one person to having 35 people, and we have more opportunities to grow outside Jordan.”

Convincing the Customer

Beyond the challenge of establishing the business and its reputation with billers and banks, there is perhaps the bigger challenge of convincing customers to use the service that needed to be tackled. The company is beginning to overcome this, but Saleh conceded that it was an ongoing battle. So how does the company operate in a country where just a few short years ago, e-payments were an alien concept to many?

“Maybe [lack of trust] was one of the barriers to opening such a business,” Saleh acknowledged. In Jordan just 5 percent of the population uses a credit card, and many are skeptical of online payments, but place more trust in their own banks. The other challenge, he said, was facing government barriers to the service. It was for these reasons that the Central Bank contract and association was so vital for MadfooatCom. “The government will stop you, and the culture will kill you … solving the first issue helped me to solve the second issue,” Saleh said.

“When people saw the new service, they used it because it was a bank service. When they knew it was a Central Bank service, they trusted it even more. So for us, this is what is changing the culture; when people see it as a Central Bank product,” Saleh explained, noting that was the reason for focusing on the B2B side of the business first. Since the service operates directly from online banking and doesn’t require its users to enter any further personal information online, the company has managed to gain people’s trust. Credible partners, such as the Central Bank, helped to “break the ice” for the company, Saleh said.

While the challenge of encouraging the use of e-payment services in Jordan is by no means fully solved, the environment is “enhancing,” as Saleh put it, and going in a positive direction. He cited the example of Saudi Arabia, where he worked as a project manager in the banking sector for many years. The SADAD service is only 10 years old, and yet has 95 percent usage across the population—a remarkable feat by any standards.

However, difficulties remain in reaching customers who don’t use online banking, and perhaps live in more rural communities. For this reason, the company is looking to expand and diversify, even signing a deal with the Jordan Post. Despite the system not being fully automated (customers will have to physically go to their local post office), the deal will allow customers to pay all their bills in one go to the post office, from where the money will then be distributed.

In light of its recent successes, MadfooatCom is beginning to set its sights on regional, and perhaps even, global reach. Late last year, MadfooatCom’s board gave approval to officially establish a company in Algeria—a country six times the size of Jordan, and one where nearly 100 percent cash payment is used. The market is, it seems, ripe for expansion at the present time, or as Saleh described it, “a blue ocean.” “It’s about expanding quickly before competition comes in,” he explained. In many countries in the region there are currently no mechanisms for centralized bill payments, beyond Saudi Arabia’s state-owned SADAD system, and bank-specific systems in the UAE.

Competition comes mainly in the form of Fawry, an Egyptian company that focuses primarily on point-of-sale technology. Fawry is currently enjoying great success, having recently been bought for $100 million, a fact that excited Saleh, who seemed keener to have cooperation more than competition. There is also potential to move into cross-border payments—a service that many migrant workers across the region would certainly welcome to pay bills and remittances at home more easily and cheaply. He suggested that a possible partnership with Fawry might be on the cards in the future, offering their respective services to Egyptians and Jordanians in each country. “The world is becoming a small village. There are lots of Arabs and even non-Arab people living in Jordan and Jordanians living outside,” he explained.

Another option for development is in Sub-Saharan African countries, where cash payments also continue to dominate. There has already been interest from the Congolese market, where the company is considering employing a white label model, in which the technology is translated into French and adapted for the needs of the local market. Since the company owns the software, this freedom to be adaptable in different contexts is something that gives Saleh further confidence for the future.

In order to fund these moves, the company has taken the decision to now raise its Series B fund. The Series A financing raised $5 million, and this time around Saleh hopes to raise double that amount, solely to fund these ambitious expansion plans. As he puts it: “the mother company will start opening other companies in the region.”

Meanwhile, looking closer to home, Saleh has big plans for the company in Jordan. Up to this point, there hasn’t been much investment in marketing by the company, something that will change in the coming year. Saleh hopes to increase the number of transactions through the site substantially—around 10 times—through a huge marketing campaign. “We look forward to having the majority of the customers or citizens using this service and offering them more services,” he said.

Some of these services may be developed soon as MadfooatCom is currently examining the options of entering the B2C market directly. “We are opening a new mobile app where you can pay by visa, MasterCard, debit cards, or any other method—we are still working on that,” Saleh said.

Other options for growth include connecting with e-commerce sites and providing the means for customers to pay online, rather than the usual cash-on-delivery model that can incur huge losses for merchandisers. By taking the reference number and adding e-commerce sites as billers, customers would be able to pay for their purchases online via their bank. “For us, the main vision is really to stop cash payments, and introduce or enhance the e-payments culture here,” Saleh said.

Despite some skeptics arguing that e-payments will unlikely gain significant traction in Jordan’s cash-reliant economy any time soon, Saleh is determined to prove them wrong. “We started small, we want to scale fast, and we think big,” he said. With the company’s current vision, it looks like he may be on the right track, and certainly has the confidence to take the plunge internationally.