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Facebook to process payments on WhatsApp Business

Mohammed Fahad
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Facebook to process payments on WhatsApp Business
  • India is expected to witness a manifold increase in mobile payments with the number of users increasing from 180m to 800m by the end of 2025.

Bengaluru: Facebook plans to start enabling shopping tools and payment collection to merchants using WhatsApp for business, more than two years after it started beta testing a similar feature in India.

The company also announced that it plans to launch a new hosting service allowing businesses to store customer communication on the cloud.

“We will expand ways for people to check out available products and make purchases right from a chat,” the company said in a new post. More than 175 million users are using WhatsApp Business accounts daily.

India was the first country for Facebook to beta test the WhatsApp Pay with over a million registrations.

However, Facebook is still awaiting regulatory approvals even as rivals Google Pay and local players like Paytm and PhoePe have expanded their service and reach.

Google Pay vs Paytm

There are conflicting reports about who leads the list.

However, S&P Global Market Intelligence points out that Google Pay and PhonePe lead the list and together handled over seven billion transactions, representing more than two-thirds of UPI transactions in 2019.

“In contrast, Paytm’s UPI transaction volumes were underwhelming, although the company holds a substantial share in wallets. For PhonePe, wallet transactions are insignificant, whereas Google Pay does not offer non-UPI payment methods,” it said in its latest report. According to it, mobile payments rose 163 per cent to $286 billion in 2019.

Meanwhile, as per estimates by Redseer Consulting, Paytm with 16 million merchants on board tops the list with 50 per cent market share followed by PhonePe (30 per cent) and Google Pay (10 per cent).

Digital payments industry in India currently stands at Rs2,153 trillion, and thanks to favourable government policies and strong use case of merchant payments across user cohorts, will grow at 27 per cent annual growth rate to reach Rs7,092 trillion by 2025.

Mobile payments are expected to grow at 58 per cent growth rate to reach Rs245 trillion by 2025, a report by Redseer Consulting said.

India is expected to witness a manifold increase in mobile payments with the number of users increasing from 180 million to 800 million by the end of 2025.

It is this market share that Facebook wants to tap into, especially as it has the largest user base is in India with 400 million daily users.

Meanwhile, amidst the Covid-19 pandemic and the lockdown, Facebook in the US launched Facebook Shop in August, which came almost a month after it launched a complementary shopping destination on Instagram called Instagram Shop.

“We also want to make it easier for businesses to integrate these features into their existing commerce and customer solutions. This will help many small businesses who have been most impacted in this time,” Facebook said in its latest blog post.

Facebook hosting service

With regards to the new hosting service, Facebook says that it will create an option for businesses to manage their WhatsApp messages via hosting services that Facebook plans to offer and plans to roll out the service during the coming months.

“Providing this option will make it easier for small and medium-size businesses to get started, sell products, keep their inventory up to date, and quickly respond to messages they receive – wherever their employees,” it added.

According to a report by Reuters, citing WhatsApp chief operating officer, Matt Idema, the shopping tool would start rolling out this year, while message hosting would become available in 2021 and will be currently offered for free

Although Facebook did not specify how much it would charge for the shopping and payment tool, it said it will charge business customers for some of the services and added that it will help WhatsApp continue building a business of our own while we provide and expand free end-to-end encrypted text, video and voice calling for more than two billion people.

Covid-19 gets Indians buying more smartphones, and of Chinese brands

Mohammed Fahad
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Covid-19 gets Indians buying more smartphones, and of Chinese brands
  • Smartphone shipments to India registered an 8 per cent growth to about 50 million units and it is an all time record for a single quarter.

If smartphone sales are a means to measure the health of the economy, India should be doing exceptionally well and if brand preferences are any indication of political choice, Chinese brands are the preferred choice.

The number of smartphone shipments to India during the past quarter has been released and it is an all time record for a single quarter, according to a report by research firm Canalys.

Smartphone shipments to India registered an 8 per cent growth to about 50 million units during the third quarter of 2020, led by Xiaomi. Smartphone shipments of Chinese vendors actually increased by about 2 per cent, compared to the same period last year. In total, Chinese vendors shipped 76 per cent  of total smartphones this quarter compared to  74 per cent a year ago.

“There are not many players outside of the Chinese space for now,” says Adwait Mardikar, an analyst at Canalys. Xiaomi remained the market leader, growing 9 per cent to ship 13.1 million units. Samsung regained second place from Vivo, with 10.2 million units, up 7 per cent. Vivo stood third, growing 19 per cent to ship 8.8 million smartphones, while Realme and Oppo had 8.7 million and 6.1 million units shipped respectively.

Source: Canalys

Explaining the reason why smartphone sales have improved amidst an economic slowdown Mardikar says, “the impact of COVID-19 in India has been a dichotomy of sorts….The lockdown forced most of working India to stay at home and refrain from big-ticket spending on travel, food and beverages, increasing the overall dispensable income.”

According to him, as much of India remains physically disconnected, the smartphone has increasingly become a necessity not only for social connection, but also for entertainment, education, banking, payment and more.

“The government, slowly but surely reducing restrictions on movement after a three month lockdown, has created the perfect atmosphere for sustained growth,” he adds.

Online channels: A true winner

While brick and mortar stores suffered, almost all vendors have shown positive shipment growth, says Mardikar.

“The true winners are the online channels, who have been buoyed with a huge influx of devices ahead of the festive season. Ongoing sales at Amazon and Flipkart are a clear indication that despite the economic downturn, India’s penchant for a good smartphone, and a good bargain, remains intact,” he says.

Though smartphone vendors are bullish for now the he warns that the numbers may not remain the same.  “Unemployment has risen, impacting the lowest rungs of society most, and affecting the long-term outlook of India’s smartphone market.”

According to him the re-entry of Micromax in the sub Rs10,000 category could also make a difference with regard to the numbers of Chinese vendors.

“They are expected to come back strong and are making the right noises. But it would take at least two to three years,” he adds.

Micromax, which was the number 2 player in the Indian market a few years ago was thrown off the big league by Chinese players. Last week the company announced that it plans to re-enter the competition and announced a new brand called “in”.

The company’s co-founder Rahul Sharma in a tweet evoked the Indian Prime Minister’s call to Make in India and the Aatmanirbhar Bharat movement said it is ready for a comeback.

Meanwhile, as per analysts, Samsung’s aggressive product portfolio and pricing strategy coupled with muted marketing campaigns by Chinese brands could have resulted in improved performance by the South Korean brand.

“Ongoing tension between India and China has been a hot topic in the past few months, but we have yet to see a significant impact on purchase decisions of mass market customers,” said Varun Kannan, analyst at Canalys.

Ongoing border conflict

“However, the tensions have caused Chinese smartphone brands to act more conservatively in recent months, reducing their marketing spend, and carefully trying to project the image that they are important contributors to, and stakeholders in, the economic future of India.”

Vivo, which in 2018 won the 5-year contract for the title sponsorship of Indian Premier League (IPL) for Rs 2,199 crore in August withdrew from this year’s sponsorship deal, following a backlash in India due to the ongoing border conflict.

Meanwhile Apple which opened its online store in India sold about 800,000 units in India in the third quarter regaining momentum. “Apple is finally paying attention to India,” said Canalys Research Director, Rushabh Doshi.

Capital gains help du to register 116% profit growth in third quarter

Naushad K. Cherrayil
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Capital gains help du to register 116% profit growth in third quarter
  • Stripping off the AED519m benefit from AED824m, the net profit is down 19.95% to AED305m.
  • Operator’s third-quarter revenues decrease by 10.33% to AED2.69b.
  • Mobile revenues up 2% to reach AED1.33b.

Dubai: Capital gains derived from the sale of its 26 per cent stake in Khazna datacentre helped Emirates Integrated Telecommunications Company (EITC), the parent company of du, to register 116.2 per cent year-over-year growth in the third quarter of the year to AED824 million.

On September 15, 2020, EITC announced the sale of its stake for AED800 million.

Stripping off the AED519 million benefit, the net profit is down 19.95 per cent to AED305 million compared to AED381 million a year ago.

The telecom operator’s third-quarter revenues decreased by 10.33 per cent to AED2.69 billion compared to AED3 million a year ago.

“At EITC, we have been quick in adapting and responding to the market disruptions. We have launched a new operating model, underpinned by an acceleration in digital transformation. The new operating model is designed to deliver growth in a digital world, and with it, long-term returns for our shareholders,” Fahad Al Hassawi, Acting CEO of EITC, said.

Dubai-based operator’s third-quarter EBITDA improved by 9.8 per cent to AED1.16 billion compared to AED1.05 billion registered in the second quarter of this year, resulting from the combination of several factors including a better revenue mix that led to an improvement of the gross margin, the reduction in bad debt provisions compared to the second quarter and the delivery of cost efficiency initiatives initiated at the beginning of the second quarter.

Mobile revenues were up two per cent to reach AED1.33 billion compared to AED1.31 billion in the second quarter as the mobile subscriber base grew by 2.8 per cent quarter on quarter to 6.59 million subscribers.

When compared to a year ago, the mobile subscribers fell 14.4 per cent from 7.7 million.

GCC cloud adoption up as Covid-19 drives digital transformation

Mohammed Fahad
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GCC cloud adoption up as Covid-19 drives digital transformation
  • Cost, strategy, regulatory compliance and availability of skillsets continue to remain some of the major challenges towards achieving digital transformation.

The transformation to cloud solutions has catapulted across the GCC, thanks to Covid-19, even as more organisations are moving towards adopting hybrid cloud solutions.

Though CIOs continue to face hindrances in terms of cost allocation, available skillsets and security concerns, the compulsions created by the onset of the pandemic have reversed the otherwise conservative approach to a more robust yet cautious move towards digital transformation.

Mostafa Zafer, Vice-President for Cloud and Cognitive Software at IBM MEA, says Covid-19 not only accented a lot of challenges but at the same time accelerated the movement to digital transformation.

Four major challenges

Listing out four major challenges towards digital transformation, he says that cost – in terms of how to be cost-efficient; compliance – to local governance and government governance and regulators; strategy – where clients want to have strategic optionality, where technology has to remain agnostic; and finally the availability of skillsets – firstly the lack of skills and also the usability of available skills.

He was speaking on “Charting the journey to the cloud,” – a panel discussion as part of the virtual GBM Unlock DX Summit.

Speaking during the discussion, Zainab Al Quwaitaei, CIO – Emirates Nuclear Energy Corporation (ENEC), says the biggest challenge is the lack or absence of digital strategy.

“There is a need to identify a clear vision and a set of goals,” she says, adding that there is still a considerable employee pushback to transformation.

“People are the key pillars of any organisation. For digital transformation, you need to get people out of their comfort zone. People feel threatened and will affect productivity,” she says, listing change management and employee adoption as the main concern among CIOis.

Right strategy

Abdullah Al Rashdi, Chief Digitisation Architect – Petroleum Development Oman (PDO), says within his organisation, initially, it was a trial of different technologies and there were failures when there was an effort made to scale up.

“We formed a specific committee which started driving to scale,” he says, adding that it is important to have the right skills.

“We started equipping the centre of excellence with the right skills and people. We had to prioritise all the initiatives and assess which are driving the maximum value. It is a journey and we need to take everyone on board,” he added.

Dr Ammar Hasan Alhusaini, Deputy Director General – Central Agency for Information Technology (CAIT) Kuwait, says the three pillars for a successful digital transformation are people, processes and the journey towards achieving it.

“We need to come up with the right strategy for digital transformation. The challenges include acceptance of change and bringing on board all the stakeholders. We have to address the lack of digital skills with upskilling and reskilling,” he said.

Sanjay Khanna, Chief Information Officer – RAKBANK UAE, says the main challenge for the banking sector is on deciding what changes you need to bring in.

Hybrid approach

“Our strategy is a hybrid approach – due to various constraints we cannot put all applications on cloud,” he says adding that lack of skilled resources, security issues and regulatory compliance continue to some of the key challenges on the cloud.

According to him, it is important for organisations to assess the business value of what they are investing when it comes to digital transformation.
“Cost management and control and decisions about when to scale up and scale down is a challenge. We have learned over the years,” he says.

Al Quwaitaei also noted that strugling to link the value of digital transformation to business is a key challenge.

Zafer meanwhile stressed on the importance for companies to automate. “there is a need for automation to free up skills and investments. Winners are those who can scale up with data and get insights in longer turn.”

Etisalat’s UAE revenue falls 3% to AED7.5b in third quarter

Naushad K. Cherrayil
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Etisalat’s UAE revenue falls 3% to AED7.5b in third quarter
  • Groups’ international revenues rise 3% to AED5.4b due to strong performance from Egypt and Pakistan.
  • Group’s net profit rises 5.7% to AED2.41b due to higher EBITDA, better performance of associates and lower federal royalty charges.
  • Acting CEO expects heightened macro risks to likely persist and continue to pressure its business at least for the remainder of 2020.

Dubai: Etisalat’s revenues from the UAE fell three per cent year on year to AED7.5 billion in the third quarter despite a three per cent increase in international revenues to AED5.4 billion.

The Group’s overall revenues stood at AED13 billion, flat when compared to a year ago.

However, the Group’s net profit rose 5.7 per cent to AED2.41 billion in the third quarter of the year due to higher EBITDA, better performance of associates and lower federal royalty charges.

Quarter on quarter, the net profit increased by one per cent.

The growth in international revenues is mainly attributed to the strong performance of Etisalat Misr and improvement in the performance of its operations in Pakistan despite the unfavourable exchange rate movement in Pakistani Rupees against the UAE Dirham.

 “In the third quarter, as restrictions began to ease, we noticed a gradual improvement in the commercial activities; however, remaining below pre-Covid-19 levels as a result of weaker macro-economics,” Hatem Dowidar, Acting CEO for Etisalat Group and CEO for Etisalat International, said.

The decline in the UAE revenues is attributed to the fact that commercial activities remain below pre-Covid-19 levels as the macro-economic situation continue to pressure consumer and corporate spending.

Mobile revenues hit badly

As a result, mobile and fixed voice, outbound roaming, visitor roaming and handset sales declined year over year. This was partially offset by growth in data, digital, wholesale and TV services.

Mobile segment revenue declined year over year by 12 per cent to AED2.7 billion, attributed to the impact of Covid-19 that resulted in a drop in mobile prepaid and roaming revenues, in addition to increased penetration of OTT services.

Fixed segment revenue increased by two per cent to AED2.8 billion, attributed to expanding eLife customer base and TV services.

Other segment revenue increased by four per cent year over year to AED1.9 billion, attributed to higher digital and ICT services.

In Egypt, revenue for the third quarter stood at AED1.1 billion, an increase of 18 per cent year on year due to strong contribution from mobile data and national roaming revenue.

Hatem Dowidar, Acting CEO for Etisalat Group and CEO for Etisalat International.

In Pakistan, revenue for the third quarter was AED0.7 billion representing a year over year decrease of one per cent but in the local currency, revenue increased in the quarter by three per cent attributed to better performance in the mobile operations, fixed broadband and Ubank segments.

Dowidar expects heightened macro risks will likely persist and continue to pressure its business at least for the remainder of 2020.

In the UAE, the active subscriber base amounted to 12.1 million subscribers in the third quarter of 2020, which declined by two per cent year on year while the mobile subscriber base decreased by three per cent year on year to 10.3 million subscribers, attributed to the prepaid segment that dropped by five per cent.

The postpaid segment grew by five per cent year over year. eLife subscription continued to drive consistent growth with a four per cent year on year increase to 1.1 million subscribers while the total broadband segment grew by three per cent year on year to 1.2 million subscribers.

Are we set to experience a mini-boom in Bitcoin again?

Naushad K. Cherrayil
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Are we set to experience a mini-boom in Bitcoin again?
  • PayPal users will be able to buy cryptocurrency through their accounts and use cryptocurrency for merchant payments, starting with the US.

Dubai: Paypal’s decision to allow customers to buy, sell and hold Bitcoin underscores that Bitcoin deniers and cryptocurrency cynics are on the wrong side of history, CEO of deVere Group said.

“Unbelievably there are still some financial ‘experts’ and financial watchdogs who believe that cryptocurrencies are not the future of money. The price of Bitcoin crossed $12,000 on the news,” Nigel Green, chief executive of one of the largest independent financial advisory and fintech organisation deVere Group, said.

PayPal users will be able to buy cryptocurrency through their accounts and use cryptocurrency for merchant payments. This will roll out over the coming weeks in the US.

There are 26 million merchants that offer PayPal around the world.

Bitcoin is trading at $12,841, up 7.87 per cent while PayPal rose 4.95 per cent to $211.96.

The late 2017 bull-run saw the Bitcoin price reach its all-time high of $20,089. 

 “Let’s be clear: This is a major step forward towards the mass adoption of digital currencies,” Green said.

Investor activity picks up

 “The blistering speed of the digitalisation of economies and every aspect of our lives, including financial lives, shows that there will be a growing demand for digital, global, borderless money – characteristics that are inherent to the likes of Bitcoin,” he said.

Moreover, he said that there’s been something of an avalanche of interest in Bitcoin in recent weeks from household-name investors.

Investor activity is picking up considerably with various on-chain metrics and ongoing – and heightening – global political, economic and social turbulence suggesting that there will be a price surge before the end of the year, he said.

PayPal said in a release that consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees.

PayPal argued that this move will “significantly increase cryptocurrency’s utility”.

PayPal obtained a conditional Bitlicense by the New York State Department of Financial Services. 

Still room for rally

Green said that there’s a growing sense that “we’re set to experience a mini-boom similar to that at the end of 2017.”  

“Prices are yet to catch up with investor interest – but this is only a matter of time as investors will not want to sleepwalk towards perhaps year-high prices in the run-up to the end of 2020.”

He believes Paypal’s decision will drive more institutional investors into the already burgeoning crypto sector, bringing with them their capital and expertise.

“The direction of travel has already been on this path, but there is a growing sense that more investors will now be preparing to move off the sidelines.Surely, the time is up for those relics who still believe cryptocurrencies are not the way forward?”

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