Top UAE Fintech Companies Disrupting the Payment Industry
Fintech is the umbrella term used to define companies based on financial technology. Fintechs are disrupting the way people do business by making processes more efficient and secure, just like those achieved in technology.
In the UAE fintech scene, several startups on blockchain & payment systems disrupt traditional models such as banks and payment services.
The landscape of fintech in the UAE is evolving rapidly as the country becomes increasingly receptive to new technologies, bringing a wave of disruptive companies that could help reshape financial services.
How Has UAE Disrupted The Payment Industry?
The Middle East region is a huge market for financial services. The total value of UAE’s gross domestic product (GDP) reached $428 billion in 2016, making it the fourth-largest economy in the Arab world.
From a banking perspective, over 80% of that amount comes from non-oil trade and investment income, including money transfers and remittances, insurance products, and securities.
Coincidentally the UAE is ranked within the top 20 countries for remittance flows in 2016. With an estimated $28 billion that year alone, it’s a huge market for fintech companies to go after.
The UK-based foreign exchange company raised $30 million in 2015 to expand into the Middle East. They’re a leader in peer-to-peer money transfers with an estimated value of $1 billion. Their services are available to over 90 countries, and they currently have over 1.5 million customers worldwide.
The UAE is home to more than 200,000 citizens from all over the world, representing more than 50 different nationalities. Their business model is centered around their ability to cut down on currency exchange costs and mitigate FX risks.
Their services are designed to help SMEs and entrepreneurs. They’re a great example of how fintech companies want to do things better than traditional banks and transfer money at a lower cost.
Founded by Irish brothers Patrick and John Collison in 2010, Stripe is an online payment company based out of San Francisco. They’re one of the largest companies to do business in the region, working with Rent The Runway, Shopify, and OpenTable.
The company just raised $245 million in series D funding to expand into the Middle East. They expanded into Singapore, Malaysia, Hong Kong, and Australia throughout 2016, but now they focus on the UAE market.
Their services are designed for businesses that accept online payments such as e-commerce, SaaS, or online marketplaces like Amazon. They’re expanding their operations to offer a complete money-solution for SMEs and e-commerce, and the UAE is one of its largest markets.
Banking on Blockchain: Evolution in Banking
The Middle East is experiencing a rapid shift from traditional banking methods to digital payments based on blockchain technology. Banks themselves aren’t usually the business innovators in this space, nor are they often early adopters of innovative technology.
Instead, it’s startups finding new ways to disrupt the financial services industry and offer solutions for traditional banks by offering alternative methods to make money transfers.
Tel Aviv-based company, Bancor is one such startup that wants to create a global liquidity network for digital currencies using blockchain. They’re utilizing smart tokens and local currencies to disrupt payment services and offer new financial opportunities worldwide.
Their ‘smart token’ protocol enables the creation of unique tokens that hold a specific value on their own within the Bancor ecosystem, giving users an effective way to create and manage liquidity.
Blockchain is enabling new businesses based on this technology to be formed, and these companies are going after the enterprise market in ways that traditional banks can’t compete with.
Mobile Banking Apps: Changing The Way People Bank
The top 10 UAE fintech companies tend to focus on creating digital platforms that make banking easier for consumers while also creating additional value and services for these companies.
The UAE is one of the world’s biggest mobile banking apps markets, with roughly 80% of the region’s population using this technology. This is a huge market opportunity that fintech companies are going after to disrupt traditional banks by offering new ways to transact with money through mobile devices.
The two largest banks in the UAE are both currently searching for new leadership, which means they’re likely to undergo big changes in the coming months and years. They’ll need to adapt to this growing wave of fintech disruption through mobile apps to continue being competitive with other financial institutions throughout the region.
Swarm is a blockchain-based crowdfunding platform that’s based in Switzerland. Their current investments include the Dubai-based logistics company known as Nomadic Think Tank. Started in 2014, they’re also involved with Spacebar and RefToken.
They recently raised $5 million through a crowdfunding campaign to help expand into international markets such as Africa, Asia, and the Middle East.
The UAE has emerged as a global leader in innovation across multiple industries, and it’s not surprising that Fintech is among these new areas of opportunity. The country is currently home to some large names in this industry, including Credit and ePayments.
Innovative Technology Startups are poised to disrupt the Traditional Banking Industry
We’re seeing a dramatic shift from using traditional banking methods to online platforms based on blockchain technology. Banks themselves aren’t usually the business innovators in this space, nor are they often early adopters of innovative technology. Instead, it’s startups finding new ways to disrupt the financial services industry and offer solutions for traditional banks by offering alternative methods to make money transfers.
Innovative startups are re-inventing the way that people think about investing. Upstart is a new platform connecting investors with students who need help paying their tuition bills in exchange for an agreed-upon percentage of their income once they graduate and begin working full-time.
The UAE government has already developed the Emirates Blockchain Strategy, which is designed to use this technology in various ways that will improve the country’s overall national competitiveness. It’s expected that this initiative will lead to even more fintech disruption across different sectors and industries within their economy.
Technology-driven solutions are providing new ways for people to save money and make choices about their investments. ShareRing is a startup based in Australia, but they’re coming up with new solutions designed specifically for the sharing economy.
They’ve also partnered with 5Miles, one of the greatest fintech companies currently operating in China. Their goal is to provide both of these companies with new ways to leverage their technology and grow rapidly in the future.
Blockchain Technology is Redefining the Future of Investing
The UAE’s desert climate makes it challenging for people to use solar power as a cost-effective solution for energy needs, so they need more innovative solutions that will help them solve this problem.
Blockchain has the potential to solve this problem by creating new opportunities for people who want to become involved in this industry and profit from selling their excess energy on a peer-to-peer market. The Dubai Future Accelerators program was created just over three years ago to encourage startups to find innovative ways to help people save money and redistribute it in new ways.
Dubai has the potential to become a leading global hub for blockchain development, which would provide a welcome boost to its economy by creating more high-wage jobs. This gives them a competitive advantage over countries like India, China, and Japan, which are also trying to market themselves as a leading hub for this technology.
Blockchain technology is still in its early stages, but it’s poised to become a saving grace for those affected by the recession and other types of economic hardship. And even without widespread acceptance from governments and large companies, startups like ShareRing are working hard to create solutions that will improve people’s lives worldwide.
By embracing this technology, governments will create a more consistent and stable economy that’s better prepared for future challenges, including global warming and other environmental concerns. And by working alongside blockchain startups like ShareRing, they’ll help people save money in new ways while also improving their economic outlook on the global stage.
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