Egypt is making headway in growing the rate of credit and debit card penetration and galvanizing mobile payments for e-commerce, but bottlenecks remain. Addressing these bottlenecks was the focus of a recent UNCTAD/World Bank fact-finding mission to assess the status of payments for e-commerce in the country.
With approximately 8 million credit and debit card holders nationwide and the numbers increasing, Egypt is making headway in growing card and mobile payments. But bottlenecks remain not only in encouraging greater consumer use of credit and debit cards and other electronic payment forms for e-commerce, but also in incentivizing Egyptian small businesses to accept cards and mobile payments.
These were some of the findings of a recent UNCTAD/World Bank fact-finding mission to assess the status of payments for e-commerce in Egypt.
The UNCTAD and World Bank collaboration responds to the request of the Government of Egypt to UNCTAD for advisory services to assist in the development of a national e-commerce strategy.
The strategy is being developed through UNCTAD's Information and Communications Technology Policy Review (ICTPR) Programme.
"We have about 70,000 points of sale. This is not enough for a huge market [of about 90 million people]," the Central Bank of Egypt's Acting Head of Payments Systems Department, Ahmed Faragallah, said.
"The problem has a lot of dimensions such as regulatory, financial, cultural, market organization and others. Each dimension must be tackled to move to the next step." Mr. Faragallah added.
Egypt's Under-Secretary for Information and Strategic Planning at Ministry of Communication and Information Technology, Nagwa El-Shenawi, said: "E-commerce can contribute to shaping a better future for Egyptian entrepreneurs and small and medium-sized enterprises. Promoting electronic payments is an important part of our objectives" .
Hesham Safwat, the cheif executive officer of Jumia, a major online shopping site based in Nigeria but active in key African markets, said: "When you're a start-up, especially when e-commerce is new in a country … one of the key challenges for us is trust."
Jumia has been operating in Egypt since 2013. Cash is currently the most common form of payment for e-commerce in Egypt and, as with other leading e-commerce retailers; 92-93% of Jumia's business is currently conducted on a cash-on-delivery basis.
The company is trying hard to cultivate trust among consumers and has grown steadily since its launch. While the e-commerce market is growing, a shift to increased electronic payments could help play a critical role in helping to drive this growth.
The findings and recommendations from the week-long mission - resulting from consultations with approximately twenty stakeholders from the Central Bank of Egypt and other banks, financial institutions and e-commerce companies - will feed into the new e-commerce strategy, which will establish short, medium and long-term targets and policy recommendations for implementation.
These recommendations are to be developed on the basis of an integrated framework of policy areas of strategic importance to e-commerce development, first presented in the UNCTAD Information Economy Report 2015.
The framework covers ICT infrastructure and telecom services; logistics and trade facilitation; legal and regulatory environment; electronic payments; skills development and building talent; e-procurement.
Other strategic measures to help galvanize e-commerce include fostering micro, small and medium-sized enterprises, facilitating innovation, exports and cross-border trade capability, promoting new payment solutions, the build-up of the consumer market, local productivity, inclusive rural development as well as the creation of job opportunities in the IT and business process outsourcing sectors.
For further information, contact:
Marie Sicat
ICT Policy Review Programme Coordinator
Associate Economic Affairs Officer
UN Conference on Trade and Development
Email: marie.sicat@unctad.org
Harish Natarajan
Senior Financial Sector Specialist
Payment Systems Development Group
World Bank Group
Email: hnatarajan@worldbank.org
Nagwa El-Shenawi
Under-Secretary for Information and Strategic Planning
Ministry of Communication and Information Technology
Government of Egypt
Email: nelshenawy@mcit.gov.eg
