MoneyHash secures $4.5M funding for its payment orchestration platform catering to merchants in MENA region

The transaction environment in the Middle East and Africa (MEA) territory is characterized by significant disintegration, with numerous payment providers and methods in each country, evolving regulations, and diverse customer preferences. This complexity is further complicated by obstacles such as payment deception, low checkout conversion rates, and high transaction failure rates.

Despite the COVID-19 pandemic expediting the acceptance of digital payments in the region, there is still insufficient infrastructure development. Payment failure rates are three times greater in the MEA region compared to the global average, with fraud rates and cart abandonment surpassing those of other regions by more than 20%. This poses a challenge for merchants, who often view payments as a cost and risk center rather than a strategic facilitator.

Platforms for orchestrating payments streamline the payment procedures for merchants through unified payment APIs. MoneyHash, a fintech company based in Egypt and operating in Africa and the Middle East, has secured $4.5 million in seed funding, which it intends to utilize for further investments in its technology and expansion across the region. This funding comes two years after the startup raised $3.5 million in pre-seed capital.

Nader Abdelrazik, the co-founder and CEO of MoneyHash, points out that 10% of all payments processed in the MEA region are digital, positioning MoneyHash uniquely for the growth phase that the region is expected to undergo over the next decade. However, navigating this emerging payments market will require patience and a dedication to continuous learning.

When merchants or enterprises launch their platforms, they typically begin by collaborating with one or two payment processing providers. As their operations expand and reach multiple regions, they onboard additional payment providers to cater to their evolving requirements. Nevertheless, integrating various payment systems presents considerable challenges. In addition to operational inefficiencies and technical complexities, in-house tech teams may take several weeks to complete these integrations. In Africa and the Middle East, these challenges are magnified by variations in payment methods, currencies, and the fragmentation between countries.

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MoneyHash payment integration catalogue. Image Credits: MoneyHash

The product offered by MoneyHash includes a unified API for integrating pay-in and pay-out rails, a completely customizable checkout experience, transaction routing capabilities with fraud and failure rate optimizers, and a centralized transaction reporting center. This is accompanied by tools that facilitate various scenarios such as virtual wallets, subscription management, and payment links. Comparable players in the payment orchestration sector include fintech companies like Revio, Stitch, Credrails, and Recital.

In an email exchange with TechCrunch, Abdelrazik provided insights into MoneyHash’s collaboration with merchants over the past four years. He asserts that payment failure rates vary significantly across the region, and relying solely on averages can be deceptive. While the standard figures indicate that around three out of 10 payments fail on average, the reality differs greatly among businesses. For some businesses, the failure rate may be as low as one out of 10, while for others, it could be as high as five or six out of 10. Moreover, these figures do not encompass customers who voluntarily abandon the checkout process before completing a payment. Abdelrazik also mentioned that most customers are unaware of the intricacies of payments and often do not realize that the leakages they encounter in payments are fixable.

Moreover, merchants are expanding at a much faster pace than their partner payment service providers (PSPs). These PSPs operate under strict regulations, leading to the slower rollout of new products and customizations compared to the growth trajectory of merchants. Consequently, MoneyHash has intensified its collaboration efforts with PSPs, specifically those serving enterprises and prioritizing customer needs.

“Businesses value the extensive network of integrations we offer not just in terms of coverage but also expertise. When they discover that we have executed all these integrations internally, they appreciate the team’s expertise and depth of knowledge, leveraging our team to address challenging queries in payments. They understand that partnering with us ensures their readiness for the future,” noted Abdelrazik, who co-founded MoneyHash with Mustafa Eid.

“This highlights the significance of team expertise for us. Most of the time, we exclusively hire individuals with backgrounds in payments and/or technology, even for non-technical roles. We have observed significant effectiveness in building a team wherein customers trust their knowledge and expertise in a specialized and crucial area like payments.”

After a beta launch in 2022 that saw the involvement of key regional players like Foodics, Rain, and Tamatem, MoneyHash unveiled its enterprise suite in October last year, targeting large enterprises. Over the past year, the fintech company, which integrates with various payment gateways and processors such as Checkout, Stripe, Ayden, Amazon Pay, Tap, and ValU, claims to have expanded its integration network, tripled its revenue, and increased its processing volume by 3,000%.

Currently, MoneyHash has 50 active paying customers. The payment orchestration platform does not provide free tiers; most users accessing its sandbox environment without payment are potential clients in the evaluation phase, surpassing 100 in number. The platform charges a blend of SaaS and transaction fees, starting at $500 + 0.4%. SaaS fees rise while transaction fees decrease significantly for large enterprises due to the volume of transactions, as explained by Abdelrazik.

The seed funding round for MoneyHash was jointly led by COTU Ventures and Sukna Ventures, with the participation of RZM Investment, Dubai Future District Fund, VentureFriends, Tom Preston-Werner (GitHub’s founder and early Stripe investor), and a group of strategic investors and operators.

Commenting on the investment, Amir Farha, a general partner at COTU, stated that his firm believes the full potential of digital payments in the MEA region is yet to be fully realized, and MoneyHash’s platform can catalyze the growth of digital payments across the region, enabling both global and local merchants to tap into new revenue streams. “We are excited to continue supporting a team that has consistently demonstrated exceptional execution, not only in securing top mid-market and enterprise clients but also in expanding value throughout the entire chain, even in challenging market conditions,” he added.

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