This has left the region vulnerable to inefficiencies: employees standing in line at the end of the month to receive their salaries in cash; contractors issuing cheques to pay suppliers; and residents travelling to collection centres to pay their utility bills by cash or cheque.
But in recent years, government officials, business executives and consumers in these “cash and cheque” environments have increasingly been exposed to online payment channels, payment kiosks, and other electronic options.
As a result, these countries are picking up the pace of their electronic-payment investments after a slow start.
But significant work remains before the region’s governments and businesses can achieve critical mass in electronic or mobile payments and be able to capitalise on a wide variety of benefits.
For governments, e-payments translate into a wider array of payment options, which stimulates local spending and eases the flow of capital by catering to more of the population.
E-payments also help promote the use of information and communication technologies (ICT). This creates spillover demand for other ICT-based products and services, and promotes the growth of e-government services and electronic services in general.
For businesses, the primary benefit is lower costs. Companies can streamline their collection processes and shorten the time required to collect, resulting in better management of working capital and greater visibility into provisioning for bad debt.
For financial institutions, e-payments allow for better management of their loan portfolios by providing greater insight into borrowing and spending patterns. This allows them to take advantage of cross-selling or up-selling opportunities in a focused and timely fashion.
Finally, e-payments offer consumers greater convenience through multiple payment channels, such as the internet, mobile portals and ATMs.
Creating an e-payment system that meets a country’s specific needs and appeals to diverse users can be a difficult task, but select cases from MENA illustrate how governments and businesses can achieve this necessary balance.
Offer the right services: an e-payment system’s offerings must account for the country’s specific supply-and-demand landscapes or the new services will be likely to go largely unused.
Until recently, up to 7 million people in Egypt received their pensions in cash each month, relying on the government’s paper-based records. Pensioners had to withdraw cash after standing in long lines.
The ministry of finance wanted to automate the process but realised the pensioners would protest if forced to use ATMs, as they were uncomfortable with the technology as well as the limited availability of the machines.
So the ministry developed a hybrid solution in which pensioners received banking cards to withdraw their payments from manned point-of-sale (POS) terminals. Pensioners could visit any pension outlet, swipe their cards, and punch in their four-digit code to view their balance and receive their pensions.
As well, a teller would be available to hand over the funds, answer any questions or simply provide elderly pensioners with the human interaction they were used to.
Although the government deployed these staffed terminals with the hopes of slowly shifting the pensioners to purely electronic channels, the near-term solution has reduced the time required to receive pensions from hours to minutes.
Involve the right stakeholders: a number of people have roles in creating and maintaining an e-payments system. Their level of involvement can be a sticking point if potential conflicts are not addressed at the outset.
One proven strategy is to formally include key stakeholders in the governance of the e-payments provider. Stakeholders are often disinterested because such projects are seen as just another IT initiative but early participation helps to identify the full scope of e-payment activities and their benefits early on.
Areas that are often missed include potential earnings from cross-selling opportunities and the level of control that e-payment systems allow.
The Abu Dhabi Government’s approach to modernising customs payments is a case in point. Like many governments in the MENA region, it had required customs payments be made by cash or cheque .
So importers had to carry large sums of cash, take the time to obtain certified cheques or make payments at a later date, which resulted in long delays in those payments.
Rather than tackle the customs-payment issue in isolation, the authorities launched in 2007 a government-wide e-payments platform, with the assistance of the Abu Dhabi Systems and Information Centre (ADSIC) and in partnership with the telecommunications operator Etisalat.
The Department of Finance defined the business needs for the system, ADSIC drove the strategy for the platform and ensured its fit within the larger e-government agenda, and Etisalat designed, implemented, and hosted the platform.
The government involved its partners early in the planning process to accelerate execution and ensure problems would be avoided or addressed rapidly.
The Customs Department was the first to use the system, which was quickly extended to other areas of its operations.
Provide the right incentives: e-payment systems rarely succeed when they are structured so that only a minority of stakeholders reap the benefits.
Governments and businesses charged with establishing an e-payment platform should therefore consider the motivations of each stakeholder and structure the system so that benefits can be fairly shared by all.
This can be achieved by quantifying the aggregate value of e-payments and developing a fee structure or revenue-sharing split in a transparent, fair fashion.
When the Saudi Arabian Monetary Agency (SAMA) was developing the value proposition for its e-payment platform, it used stakeholders’ transaction costs to determine its pricing.
By consulting with the billers – such as the utility providers, telecoms operators and insurance companies – and banks about what it would cost to implement payment systems and services, SAMA was able to reach out to these critical participants and assure them the platform would actually reduce their costs.
It would also offer the advantages of a national platform accessible to all.
E-payments will allow the MENA governments and businesses to better manage their working capital and operate more efficiently.
But for e-payments systems to truly gain traction, the benefits must extend beyond those making the investment. Service providers, financial intermediaries, government agencies and consumers all have something to gain as long as an e-payments system involves them from the start.
With a focus on serving the needs of key stakeholders and customising e-payments offerings to local conditions, these success stories will become the rule, not the exception.
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Autor(en)/Author(s): Ramez Shehadi, Lutfi Zakhour and Charles Habak
Quelle/Source: The National, 24.07.2ß1ß
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