RIYADH: Stimulating a growing trend of traditional banks investing in financial technology, Dubai’s Mashreq Bank announced a $10 million investment in Cashews, one of the leading “buy now, pay later” service providers to consumers in the UAE and Saudi Arabia.
“It is the first such investment from a conventional bank in a fintech company in the region. It’s a very strategic investment too. It’s not just about money; It’s much more than that, co-founder and CEO of Cashew Payments, Ammar Afif, told Arab News.
As part of the strategic investment, Mashreq will integrate cashew payments as an option into NEOPAY, Mashreq’s payments subsidiary, and provide support for the launch of cashews in Egypt.
“We will offer BNPL cashews as a payment option for NEOPAY merchants. This will help merchants give customers broader payment options, thus increasing their business,” Vibor Mondada, CEO of NEOPAY, told Arab News.
He added, “We will build a seamless payment experience for our online and offline merchants to accept cashews as a payment option. We will also build longer term BNPL options.”
The deal with Mashreq is unique in the Fintech space in the region as it goes beyond a mere processing relationship between two financial institutions.
Cashew and Mashreq will also collaborate and bring new products to market, including longer tenures, larger ticket-volume BNPL options for consumers and the introduction of first-of-its-kind point-of-sale lending options in the region later this year.
In addition, Mashreq will provide cashew nuts services and products to its merchants and commercial banking customers.
Launched in 2020, Cashew has over 200 retailers on the platform and is currently making $1 million per month in transactions. “This is expected to multiply tenfold by the end of the year as a result of the partnership with Mashreq,” Afif told.
He added, “We are the only national bank in the region that collects data such as Emirates ID cards and connects banks to get more information to get a better result so that consumers who are likely to default are rejected.”
The new partnership will bring a new product to the market with key features.
“Mashreq will bring many benefits to our customers with the increase in our service offerings,” Afif explained. This partnership will give consumers the largest commercial shopping network, greater ticket size and the ability to pay at longer periods. We can only achieve these goals for our clients by partnering with reputable financial institutions like Mashreq that understand and want to be part of the growing BNPL sector.”
value added services
NEOPAY wants to focus on adding more payment options and value-added services for its merchants, and Cashew’s deal fits well with its growth strategy.
“The focus is on using payment data to enhance business results for the company’s merchants, adding more payment options from around the world, enhancing multi-channel payment offerings, and providing VAS packages such as ERM solutions with our payment offerings,” Manda said.
“It is clear that Saudi Arabia is the perfect market for us to launch point-of-sale financing, which is done in a Sharia-compliant manner,” Afif said, adding that he will be introducing this service in the kingdom over the next few months.
Speaking about his plans for the Saudi market, Afif reiterated that “there is a great opportunity because there are a lot of people who do not have credit cards today because they think that credit cards may not be compliant with Sharia.”
With a mission to provide consumers with smart instant financing solutions through an easy and seamless payment experience, Cashew aims to tap into sectors such as education, travel and healthcare that remain largely untapped.
Afif went on to add that it is targeting young millennials, who have no credit yet. “They have graduated from school. They have their first job; they are trying to build their credit, but the banks are not going to give them a loan to buy something in 12 months or so.
“This is where the cashews will help fill that void. Again, it will be the ultimate relationship between the consumer, the cashew and the bank. So once that amount is paid off, they will start creating credit. So, one day buying a car or a house will become much easier.”