Middle East and Africa (MEA)-focused payment orchestration platform MoneyHash has raised $5.2 million.
The pre-Series A round will allow MoneyHash to continue its focus on improving the payments landscape in emerging markets, the company said in a Tuesday (Jan. 21) news release.
“In emerging markets, payment infrastructure remains significantly underdeveloped, with failure rates three times the global average and fraud rates and cart abandonment over 20% higher than developed markets,” MoneyHash Co-founder and CEO Nader Abdelrazik said in the release.
“Drawing from our extensive experience in MEA, one of the most challenging regions globally, we’ve seen firsthand how these issues transform payments from a growth enabler into a cost and risk center.”
He added that there’s an immense opportunity here, as digital payments make up just a small portion of transaction volume in emerging markets.
The company’s payment operating system integrates with merchants’ existing payment providers while offering capabilities such as a “unified API for pay-in and pay-out operations,” and “sophisticated transaction routing with built-in fraud prevention,” along with features such as recurring payments, virtual wallets, subscription management, and payment links.
All of this allows businesses to “confidently scale their payment operations while maintaining superior performance metrics,” MoneyHash Chief Operating officer Maram Alikaj said in the release.
PYMNTS looked at the payments landscape in emerging markets last year in a conversation with Eduardo de Abreu, VP of product at EBANX.
“When it comes to B2B payments in emerging markets, one very interesting thing is that currently more than 70% of all companies are buying online, but just 30% of the payments are done digitally,” he said.
This imbalance underlines the friction in the payments process, including lengthy settlement times — in many cases averaging 14 days — along with the lack of visibility into transaction costs and timelines.
“Speed and transparency are the two biggest pain points,” de Abreu said. These challenges have hindered the ability of businesses to optimize their cash flow, especially in high-growth sectors such as software as a service (SaaS).
However, the situation isn’t hopeless and is in fact quite promising — due to advances in instant payment solutions.
Instant payments shrink these delays, allowing funds to transfer in real time. And by doing away the wait associated with traditional bank processing and batch clearing cycles, de Abreu said, businesses can get faster access to working capital, improving liquidity and allowing them to focus on growth rather than closing off cash flow gaps.
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