Fawry: Egypt’s Bill Paying Solution for the 21st Century

Fawry: Egypt’s Bill Paying Solution for the 21st Century

Fawry, a payment service available through Egyptian banks and a nationwide network of retailers, enables customers to pay their bills securely and conveniently through channels available 24/7 via one’s bank ATM — as well as Internet banking, mobile banking and Interactive Voice Response technology.

Unlike its western counterparts, up until recently Egypt has maintained a cash-based transaction commerce system. According to research cited by Fawry founder and CEO Ashraf Sabry, only 1.5 percent of household consumption is paid electronically. Credit card use is minimal as well. Of 13 million credit cards in circulation within the country, most are debit cards used once a month to withdraw account holders’ salaries from ATMs. That money is kept at home for cash purchases.

“The problem in Egypt is that companies which have bank accounts sell services to people with no bank accounts,” Sabry said. “You could say the sellers are at the top of a pyramid and the buyers at the bottom. We connect them.”

Beginning in 2010, Fawry — which employs 250 people and has already collected more than $220 million — introduced a number of channels to facilitate bill settlement, levying a convenience fee on bill payers and a collection fee to billing companies.

The company has also allied with MasterCard to launch an online payments portal. Twelve banks — representing some 80 percent of Egypt’s banking capacity — offer its services over the counter, on the Web, or through its ATMs. For the vast number of Egypt’s population that does not have access to the Internet or a bank, Fawry offers bill payment at the corner store for a nominal fee. The company’s services are now available at about 16,000 retailers and 1,300 post offices, Sabry said, adding that the software underpinning Fawry’s complicated system — which links clients, billers and banks — is Egyptian and designed completely in-house.

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“When we started we looked at payments systems in countries like Turkey and South Africa,” he said. “The South African example bore a closer resemblance to conditions in Egypt, but they had to no appetite for collaboration, so we ended up building our own model.”

Sabry added that Fawry is contributing to the expansion of banking services by placing machines that accept credit cards in shops most card companies overlook because of the small potential for profit. Acceptance is critical to both Fawry and MasterCard, and both companies have keenly developed solutions to expand on that. The alliance is further strengthened by adding segments not accessible before, such as customers not using banks to do business.