Recalling the beginning, Omar Sahib – CEO of WEBXPAY simply says, “Back when we started there was no regulation! It was unthinkable for banks that a third party could handle online payments. But there were guidelines by Visa and Mastercard. It was happening elsewhere and it was high time for Sri Lanka.” The year was 2016 and the concept of fintech in Sri Lanka was just getting off the ground.
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Just 4 short years later, things are quite different. Today, there’s a flurry of digital wallets, and banking apps popping out of the woodwork. All of them hungry for your money. But as Omar reflects on the origins of WEBXPAY, he smiles with pride. Its launch in 2016 meant the company was able to seize a first mover advantage. Thus, it now handles payments for approximately 1,500 clients. The list includes over 100 high end brands in Sri Lanka, such as Nawaloka, Mackinnon’s Travels, SLIM, and more.
The birth of a fintech called WEBXPAY
Omar began his career at HSBC. Later in 2009, he moved to Global Payments, which is one of the largest payments service providers worldwide. He would spend 6 years at the company as Head of Product Development. In this role, he would introduce a number of early fintech products into the market.
It was here that he met his cofounder, Nazeem Mohamed. He too had spent 15 years at HSBC where he served as the Head of Card Acceptance for Sri Lanka and the Maldives. Nazeem would go on to spend another 9 years at Global Payments as its Director for Sri Lanka and the Maldives. Combined, the duo share over three decades of experience in banking and payments.
It was during their time in the formal banking industry that they noticed a problem. In their roles, they had introduced internet payment gateways (IPGs) to the market. Expectations were that they’d revolutionize payments. However, the reality was that merchants were not adopting this technology. Sri Lanka was steadfast in its determination to be a cash based economy.
Omar was on the frontlines selling IPGs and offering technical support when they were first introduced. From this experience, he identified 3 key factors that hampered the growth of online payments. Firstly, IPGs were expensive. At the time, if a business wanted to accept online payments, they’d have to go to a bank. The bank would then charge them anywhere between Rs. 75,000 to Rs. 100,000 as a setup fee. On top of this, they’d also charge an additional Rs. 100,000 as an annual fee.
Secondly, integrating multiple IPGs were a complex time-consuming process. On average, it would take 6 months of work before they were operational. For businesses, this meant not only lost time but also bearing the additional cost of integrating multiple payment gateways. Thirdly, there was no one-stop-shop to accept all forms of online payments.
Having witnessed all this first hand, in 2016 Omar and Nazeem bid their corporate jobs goodbye. The duo jumped headfirst into the startup world wanting to fix all the issues that prevented eCommerce from thriving. And so, WEBXPAY was born.
The early challenges of an early fintech
When WEBXPAY officially launched in April 2016, it offered everything an eCommerce company would need. From managing web pages to accepting payments, the company covered it all. Even smaller businesses operating on social media could use its online payment link generator to accept payments.
No longer would eCommerce companies need an army of developers or sign agreements with multiple banks. Of course, to accept payments they first had to navigate a sea of regulations. A particularly complex challenge since there were no regulations at the time. Thankfully, this was where Omar and Nazeem’s experience in the banking industry would help them shine.
Describing how they navigated their unique complex challenge, Omar explained, “The banks didn’t know anything about payment service providers. Visa and MasterCard had a payment service provider rule guidebook. I showed this to the banks, they verified it, and we went ahead. We prepared a 300-page document covering everything from KYC (Know Your Customer) to policies such as anti-money laundering and counter terrorist financing. We presented our policies and procedures to the Central Bank and other Licensed Financial Acquires WEBXPAY worked with.. Since we came from a banking background so it allowed us to easily work with the banks. Even when the Central Bank stepped in to introduce regulation in 2018, we quickly adapted without any issues.”
Today, it’s the only non-banking payment gateway service provider to have partnerships with several banks namely, Hatton National Bank (HNB), Commercial Bank, Nations Trust Bank, DFCC Bank and a few are to join hands with WEBXPAY
Getting companies to invest in their eCommerce strategy
At the time of writing, WEBXPAY has amassed over 1,500 clients. Looking into the horizon, Omar added that the company is currently looking at expanding into the travel sector owing to its growth. That’s not to say the journey has been smooth sailing.
Omar emphasizes that they don’t merely sell a payment gateway. Rather, they work with companies and advise them to ensure they get the most out of eCommerce. But for this to succeed, the companies need to be invested in their own success. “You can’t simply add a payment gateway and expect to make millions overnight,” says Omar.
To that end, Omar argues that companies must be dedicated to a plan outlining their goals. With this plan in place, they must be determined and daring to achieve these goals. If so they can then brush aside any obstacles to find success with eCommerce and business in general.
A former banker’s optimistic view on fintech in Sri Lanka
Despite technology reshaping many facets of our world, there are still holdouts that have no desire of embracing it. Of course, when one takes the fintech industry, this is true across the board. Sharing his experience, Omar stated that this prevalent in family-run businesses. Nevertheless, he remains optimistic.
It’s no secret that Sri Lanka is a cash-based economy. The data from the Central Bank of Sri Lanka is proof with cash being the predominant method of payments, with cheques coming in 2nd place. For years, this has been the status quo. It has held back online payments and local eCommerce from prospering.
However, in recent times, we’ve witnessed a surge in digital payments driven by eWallets, banking apps. Granted they’ve still got a long way to go before becoming the de facto method of payments. But the key to shifting the status quo may lie with ride hailing apps. Despite some resistance from drivers, many have promoted the use of digital payments.
“We’re increasingly seeing the introduction of new payment methods like QR codes in the market. It may take a few years before we start utilizing these cashless methods as the primary means to make payments, but I’m optimistic it’ll happen. Ride hailing apps in particular like PickMe and Uber are driving cashless payments. Our job will be to ensure our clients can adapt to these methods and profit,” says Omar describing the role of WEBXPAY in a cashless future.
When asked how he looks at tackling such challenges as adoption, Omar returns to his 3Ds (Determination, Dedication, Daring) and elaborates “Over the past 4 years, I’ve learned a lot as an entrepreneur. Any problem you face can be overcome if you have the right qualities. From this experience, I know what constitutes as good advice. Founders will get advice from everyone they meet. They must critically question this advice based on their experience if they wish to succeed.”
What’s next for WEBXPAY?
As they look into the future, Omar believes the key to growth is by supporting SMEs to go online. “There are thousands of SMEs in the country. Our immediate goal is to get 5,000 SMEs online. Afterwards, we’d be poised to expand beyond Sri Lanka,” he states summarizing their future plans. Of course, WEBXPAY isn’t ignoring larger corporates and is in discussions with hospitals and conglomerates in the travel industry. Ultimately, it’s aims are simply to help businesses of all sizes come online and find success.
