Exclusive interview with Mohamed Touhami El Ouazzani, Visa Inc

During the Prepaid Summit Middle East (18 March, 2015) you claimed that Africa will see the largest increase in electronic payments until 2016. What are the factors which will help Africa register such a growth, as compared to other continents?

First, we need to highlight that the widespread adoption of electronic payments, since the first card was introduced in 1958, resulted in greater benefits for governments, citizens, and economies at large. In a study commissioned by Visa and based on the examination of 56 countries, Moody’s Analytics found the following:

• Greater usage of electronic payments added USD 983 billion in global economic growth (2008–2012)
• Growth in GDP equivalent to creating 1.9 million jobs
• Electronic payments contributed to: 0.8% increase in GDP in emerging markets and 0.3% increase in GDP in developed markets
• Card growth boosts recovery—Global real GDP was only 1.8% per annum (2008–2012); without increased card usage, that growth would have been 1.6%

Africa is the continent that is currently witnessing a considerable growth in the adoption of electronic payments due to mobile penetration and the inclination of a number of African countries to use mobile as an effective tool of financial inclusion. According to the Financial Inclusion Index, the global Findex database, globally, nearly all adults who reported owning an account said that they have an account at a financial institution: 60% reported having a financial institution account only, 1% having both a financial institution account and a mobile money account, and 1% a mobile money account only.

Sub-Saharan Africa is an exception to this picture. There, almost a third of account holders—or 12% of all adults — reported having a mobile money account. Within this group, about half reported having both a mobile money account and an account at a financial institution, and half having a mobile money account only. The figures released by the Findex suggest that Kenya has the highest share of adults with a mobile money account, at 58%, followed by Somalia, Tanzania, and Uganda with about 35%. In southern Africa, penetration of mobile money accounts is also relatively high, at 14%, but just 2% of adults reported having a mobile money account only.

This clearly indicates how technology is being used to make strides in financial inclusion efforts. Visa is quite aware of this fact and our products and services do aim at reaching unbanked segments, through our financial partners, while utilizing innovation and technology. Towards the goal of achieving universal financial access, Visa will work toward providing electronic payment accounts to another 500 million underserved people by end of 2020.

What solutions has Visa released in order to meet consumer needs in Africa in terms of electronic payments?

Conceptually, cross-border ecommerce requires legislations, infrastructure in terms of internet penetration, adoption of new technologies either by banks or by consumers, certain degree of maturity on the merchant side, and education to the cardholder on the benefits and possibilities. As we payment technology leader, we work with all stakeholders to provide insights, expertise, and assistance wherever possible.

We work with our clients, banks; in all markets to avail the products and services needed to ecommerce and we do help in standardizing practices as per the guidelines governing our practices. ECommerce is transforming and Visa will continue to bring together innovative leaders from across industries to deliver the best new payment experiences. The main industries include device manufacturers, financial institutions, merchants, developers and other members of the payments and commerce ecosystem.

Through Visa Digital Solutions, a comprehensive suite of offerings that facilitate secure payments across a broad range of Internet-connected devices and wearables, Visa is making it possible for consumers to make a payment without their wallet through multiple product and services, including:

• Visa Checkout: Provides a faster, easier way for consumers to pay online and on mobile devices. Anywhere you see the Visa Checkout button, you can breeze through the checkout process with a single sign-in. Available in 16 markets, Visa’s application programming interfaces (APIs) for Visa Checkout are available to merchant developers, as well as SDKs for in-app payments.
• Chip Cards: Chip cards and chip-activated terminals work together to protect in-store payments. A unique one-time code is generated behind-the-scenes that is needed for the transaction to be approved – a feature that is virtually impossible to replicate in counterfeit cards. It’s easy for your customers to use and for you to adopt. Starting October 1, 2015, businesses that dont accept Visa chip card transactions may be responsible for any resulting counterfeit fraud.
• Visa payWave: A tap-to-pay technology that offers easy in-store payments for consumers and is currently being used with Apple Pay, Samsung Pay and mobile apps offered by financial institutions. Consumers simply wave the phone at the point-of-sale with their mobile device to make a payment.

How can the banking system support the digital agenda in the African countries, given that there are more and more customers adopting mobile banking solutions for online purchases?

Through our continuous cooperation with banks in Africa, we aim to help our clients avail innovative products and services to cardholders. Visa applies 50 years of experience and investments to ensure consumers, businesses and governments in more than 200 countries can engage in commerce with absolute peace-of-mind. They expect Visa to work securely, everywhere – every time. Today, more than 22 percent of global consumer spend is enabled by Visa products. As payments migrate to smartphones, tablets and other connected devices, VisaNet – our global network – is the ideal foundation for innovation and growth.

Our technology investments are aimed at making commerce safer, easier and smarter, enabling new ways to pay, while providing merchants and financial institutions with deeper and more accurate insights. VisaNet provides secure, reliable payments for more than 2.3 billion Visa account holders, 40 million merchants and 15,000 financial institutions around the globe while the intelligence and speed of our network allows Visa to authenticate sellers and buyers with 97% accuracy – in less than 300 milliseconds. Visa is committed to make ecommerce safer, smarter and easier, regardless of location or device, and is making significant investments to accelerate the shift to electronic payments and drive innovation in mobile and digital platforms.

• July 2014: Visa launched Visa Checkout, the fast, easy, secure way to pay online, and opened an Innovation Center in San Francisco’s landmark building, One Market.
• September 2014: Visa announced its plans to strengthen its technology resources by creating 2,000 full-time technologist positions in India, Singapore and the US as well as announced plans to open a new technology center in India.
• October 2014: Visa supported the launch of Apple Pay on the newly released iPhone 6 and iPhone 6 Plus through Visa Token Service, which replaces sensitive payment account information found on plastic cards, such as the 16-digit account number, expiration date and security code, with a unique series of numbers that can be used to authorise payment without exposing actual account details.
• March 2015: Visa announced support for Samsung Pay on the new Samsung Galaxy S6. The service, which will go live in summer 2015, is supported by Visa Token Service technology.
• September 2015: Visa will launch a global Developer Platform. For the first time in our 50-year history, Visa will provide open access to Visa payment capabilities and assets. This will allow developers to make Visa payment functionality a core element of their mobile applications, digital wallets or other innovative ideas yet to be imagined.

Where would you place mobile network operators (MNO) in the African e-payments scheme?

MNOs play a very salient role as they are key partners in the creating the ecosystem of electronic payments. The sheer outreach of MNOs across Africa signifies how important they are to the development and proliferation of electronic payments. Innovations in our industry do take advantage of this outreach. Visa believes that cloud-based mobile payments represent a significant opportunity to accelerate mobile payments globally.

Visa is technology agnostic and believes in an “open” approach to mobile payments: empowering consumers to make mobile payments with whatever device / mobile network / payment application they choose. Ensuring payment security is one of Visa’s highest priorities and NFC-enabled mobile payments are no exception. Several layers of security at the device, chip and Visa network levels work in concert to help prevent unauthorised use of mobile-based Visa accounts.

What is Visa’s future agenda of development in the Francophone Africa in terms of financial services offered to its current and possible customers?

Across Africa, we are constantly working with our clients to launch new services and products. We are also working with governments to help and facilitate the shift towards electronic payments. We have provided 47 governments with over 5000 solutions that tackle taxes collection, public transportation, subsidy, government payroll, among other services offered by governments to citizens. Visa believes that 2015 and 2016 are the years in which fast and safe mobile payment technology will proliferate around the world. Connected devices are changing everything we know about shopping and paying as commerce increasingly shifts from the physical to the digital world.

More than one-third of the world’s online population, currently reported as 3 billion, has already made a purchase online. In the digital world, more and more commerce is moving from the PCs to connected devices, including mobile phones, tablets and wearables (watches, bracelets, smart clothing) – particularly in emerging markets. Consumers are leading this shift as their appetite to adopt new technologies and devices increases at a remarkable rate. Today, we’re at the beginning of another shift in the ubiquity of payments – and in the meaning of everywhere. Almost any connected device can be transformed into a place where shopping, buying and paying happen. This is the new era of connected commerce.

To usher in this new era in payments, Visa is making significant enhancements to its network, building new services and tools for its clients and delivering new payments experiences to merchants and consumers. These new solutions are made available through Visa Digital Solutions, a comprehensive suite of offerings, which makes secure payments accessible across a broad range of internet-connected devices and wearables.

About Mohamed Touhami El Ouazzani

As General Manager for Morocco and Francophone Africa at Visa, El Ouazzani is responsible for the growth and development of the company’s business in these markets and for pioneering new opportunities in Francophone Africa. In his role, he manages strategic relationships with key financial institutions, industry partners and governmental bodies. He joined Visa in 2006 in marketing and communications for the Middle East and NorthAfrica region and ran integrated campaigns across GCC, North Africa and Levant.

About Visa Inc

Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories, enabling them to use electronic payments instead of cash and checks. Visa provides processing services to our financial institution clients through VisaNet, a centralized and modular payments network providing three essential functions in one complete, flexible package: transaction processing services, risk management services and information services.

Stay tuned for the second part of this exclusive interview with Mr Mohamed Touhami El Ouazzani, to be published in the upcoming edition of our Online Payments Market Guide (release date: October 2015).