The payments landscape in the Middle East and Africa (MEA) region is characterized by significant fragmentation, with multiple providers and payment methods in each country, evolving regulations and different customer preferences. This complexity is further compounded by challenges such as payment fraud, low checkout conversion rates and high transaction failure rates.
Although the COVID-19 pandemic has accelerated the adoption of digital payments in the region, infrastructure development remains insufficient. Payment failure rates are three times higher in the MEA region than the global average, and fraud and cart abandonment rates exceed rates in other regions by more than 20%. This presents a challenge for merchants, who often view payments as a cost and risk center rather than a strategic factor.
Payment orchestration platforms simplify payment processes for merchants through unified payment APIs. Egyptian fintech MoneyHash, one of those in Africa and the Middle East, has raised $4.5 million in seed investment, money it plans to use to further invest in the technology and grow it across the region. This comes two years after the startup secured $3.5 million in pre-seed funding.
Nader Abdelrazik, co-founder and CEO of MoneyHash, highlights that 10% of all payments processed in the MEA region are digital, positioning MoneyHash uniquely for a phase of growth that the region will inevitably experience over the next decade. However, navigating this growing payments market will require patience and a commitment to continuous learning.
As merchants or companies launch their platforms, they often start by partnering with one or two payment processing providers. As their business grows and expands into multiple regions, they integrate additional payment providers to meet their evolving needs. However, integrating different payment stacks presents significant challenges. In addition to operational inefficiencies and technical complexities, internal technology teams can take several weeks to complete these integrations. In Africa and the Middle East, these challenges are compounded by differences in payment methods, currencies and isolation between countries.
MoneyHash Payment Integration Directory. Image Credits: MoneyHash
MoneyHash’s product includes a unified API for rail and payment rail integration, a fully customizable checkout experience, transaction routing capabilities with fraud and failure rate optimizers, and a central transaction reporting hub. This is complemented by tools that enable various use cases such as virtual wallets, subscription management and payment links. Fintechs such as Revio, Stitch, Credrails and Recital are similar players in the payment orchestration space.
In an email interview with TechCrunch, Abdelrazik shared insights about MoneyHash’s partnership with merchants over the past four years. First, he claims that failure rates across the region vary widely, and relying solely on averages can be misleading. While the standard figures are about three in 10 payments that fail on average, the reality varies widely between businesses, he said. For some, it can be as low as one in 10, while for others it can be as high as five or six in 10. Additionally, these numbers do not include customers who voluntarily abandon the checkout process before making a payment. The CEO also noted that most of its customers don’t know much about the complexities of payments, and often don’t know that most of their payment leaks can be fixed.
In addition, merchants are expanding much faster than their payment service provider (PSP) partners. These PSPs operate under strict regulations, making the launch of new products and customizations slower than the development trajectory of merchants. As a result, MoneyHash has intensified its cooperation with PSPs, especially those that serve businesses and prioritize customer requirements.
“Businesses appreciate the large integration network we have not only for coverage but also for expertise. When they know we’ve done all of these integrations in-house, they appreciate the team’s expertise and depth of knowledge and leverage our team to navigate difficult payments questions. They know that working with us makes them future-proof,” noted Abdelrazik, who founded MoneyHash with Mustafa Aid.
“This means team expertise is key for us. Most of the time, we hire exclusively with payment and/or technology backgrounds, even in non-technical positions. We’ve seen huge efficiencies in building a team where customers trust their knowledge and expertise on something as specialized and critical as payments.”
After a beta release in 2022, which gathered the participation of key regional players such as Foodics, Rain and Tamatem, MoneyHash launched its enterprise suite last October, targeting large enterprises. Over the past year, the fintech, which integrates with various payment gateways and processors including Checkout, Stripe, Ayden, Amazon Pay, Tap and ValU, claims to have expanded its integration network, tripled its revenue and increased its processing volume by 3,000%.
Currently, MoneyHash has 50 active paying customers. It does not offer free levels. Most customers accessing its sandbox without payment are prospects in the evaluation stage, numbering over 100. The payment orchestration platform imposes a combination of SaaS and transaction fees, starting at $500 + 0.4%. SaaS fees increase while transaction fees decrease significantly for large enterprises due to volume, Abdelrazik explained.
MoneyHash’s seed round was co-led by COTU Ventures and Sukna Ventures, with participation from RZM Investment, Dubai Future District Fund, VentureFriends, Tom Preston-Werner (GitHub founder and early Stripe investor) and a group of strategic investors and operators.
Speaking about the investment, Amir Farha, general partner of COTU, said his firm believes the full potential of digital payments in MEA is yet to be tapped and MoneyHash’s platform can catalyze the growth of digital payments across the region , allowing both global and local merchants to tap into new revenue streams. “We are excited to renew our support to a team that has consistently demonstrated superior performance, not only in securing leading mid-market and enterprise clients, but also in extending value across the entire chain, even in challenging market conditions,” he added.
