UK-based dopay Makes Payroll Cashless for Workers in Egypt

Paying employees 24/7/365 days a year might be the norm in Europe, but not in a country like Egypt, said dopay CEO and Founder Frans van Eersel.

Cashless transactions make up only 45% of payments in the North African country, which has the world’s third-highest percentage of unbanked citizens (67%) behind Morocco (71%) and Vietnam (69%), according to Egyptian daily publication Enterprise.

As a result, most workers in the country are paid in cash, and companies must manage the operational struggles and security risks that are associated with it. Employers that try to transition to digital payments can spend up to 30 days to open an account for their workers, navigating the heavy-handed bureaucracy that is all too common in the country. Van Eersel said that’s the problem the U.K.-based, MENA-focused FinTech startup is solving.

The 5-year-old FinTech was awarded a banking agent license through Arab Banking Corporation Egypt (Bank ABC in Egypt) last month, allowing it to launch a next-generation virtual banking platform that drastically cuts down the time required for unbanked workers to get access to a bank account.

“It essentially means that we can onboard employees literally in seconds,” something that could take up to 30 days to do previously, van Eersel told PYMNTS in an interview. Companies can now instantly open accounts for their employees and their beneficiaries and pay them in real time, including during weekends and holidays.

Companies simply need to upload an ID on the platform and provide the names, mobile numbers and locations of workers to kick off the process. The next day, a prepaid debit card in partnership with Mastercard is issued, enabling 24/7 access to funds via ATM withdrawal.

Recently, the company announced that it has closed an $18 million Series A round: “The money we have now raised allows us to scale in Egypt and get more businesses,” he said. “It also allows us to build out our product and tech teams so that we can launch new products.”

The platform has already onboarded hundreds of corporate businesses, ranging from small and medium-sized businesses (SMBs) to global companies like McDonald's and Swvl. According to van Eersel, the company has a huge backlog of companies that will be onboarded onto their platform in the coming weeks.

Changing Landscape

Egypt has a very young and tech-savvy population, which makes dopay even more attractive for young workers. “Most of them have smartphones and social media penetration is immense, so people really like it,” van Eersel explained, hinting at the huge untapped potential in the market. He added that there are many things happening in the country’s payment landscape that will eventually lead to a “complete revolution.”

Until recently in Egypt, it could take up to three days to transfer funds between accounts, but that is changing, said van Eersel. “For banks, it’s already near-instant, and I think in a few weeks, that will apply to all the banks, so that in itself will completely change the landscape in Egypt,” said van Eersel.

He said the change will make it easy for employers to easily transfer money from their existing bank to a master account that dopay has with its partner bank, making it a very smooth process for its clients McDonald's and popular ridesharing company Swvl.

But even with the strong demand, the right technology, the right teams and the money to scale up, the biggest challenge remains navigating the complex regulatory landscape in the country. “It took us two years to get to where we are and to get through all the hoops for the regulator to get the approval [for the license],” van Eersel noted.

He said Egypt’s central bank is very encouraging of FinTechs, but it still doesn’t make the time-consuming process any easier to navigate. “And sometimes you want to do things that are not embedded in the regulations yet,” he noted, which means pushing off the launch of new products until regulations are put into place.

According to van Eersel, Egypt has experienced a major leapfrog in the last year, and there are wider opportunities for businesses to scale, which is a sign of a bright future ahead. “I think our entry point works really well in many of the emerging markets, because we see that businesses have a role to play, and we have a solution for that,” he added.