Checkout.com leads MENA’s largest round for fintech Tamara
With that MENA’s e-commerce sector will be worth $49bn by 2022, Tamara’s ascension appears to position it at the forefront of the region’s burgeoning fintech sector. News of its Series A success has quickly followed its $6m seed funding round in January 2021, itself the largest of its kind in Saudi Arabia.
The ‘by now pay later’ (BNPL) fintech allows customers to split transaction costs into three payments over the course of two months, or pay over a 30-day period.
Either option comes on a “no hidden fee” and “no interest rate” basis. The app is currently available on both the Apple App Store and Google Play.
The rise of BNPL
According to Abdulmajeed Alsukhan, Co-Founder and CEO, Tamara and by extension BNPL generally are fulfilling a core consumer need:
“The region and the world need payment solutions that are transparent and customer-oriented. At Tamara, we offer our customers an alternative to credit cards and Cash on Delivery (COD), which enhances their shopping experience. Our solution also increases our merchant partners’ efficiency as well as their customer satisfaction.
“This transaction is only the beginning of our journey, and a great sign that we are on the right track. We are proud to have the trust of such an investor and we will continue expanding our products to transform the payments industry in the region.”
is keenly aware of the need for payments solutions that embrace the opportunities of the digital era. Helping customers unlock revenue through its unified platform, it has reached a value of more than $15bn and has plans to expand further into the US market via New York and Denver (it has one office in San Francisco).
Sebastian Reis, Executive VP at Checkout.com, explained that his company’s investment will enable Tamara to follow a similar trajectory.
“Tamara has rapidly proven itself to be a natural leader in the BNPL space. Our investment in Tamara will help the team realise their vision and expand rapidly, driving greater conversions for retailers and offer more flexibility for consumers.”
Image source: Tamara
Bank of Israel releases a draft model for potential CBDC
The Bank of Israel (BoL) explained that it has been exploring the concept since 2017. However, while it has a head start on others in this regard (see: the Bank of England), the bank has yet to decide whether issuance of a CBDC would be advantageous.
As is the general philosophy with CBDCs, the proposed ‘digital shekel’ would co-exist with other extant forms of currency currently used in Israel. The value proposition, as mapped out by the BoL’s Steering Committee, is as follows:
- An efficient and secure method of alternative payment in the digital economy
- The adoption of next-gen technology to bolster the country’s financial future
- Bolstering payment infrastructure during “emergencies or breakdowns”
- Laying an inexpensive foundation for cross-border payments
- Enabling the use of secure digital payment platforms
- Reduce the overall use of cash to combat the “shadow economy”
Are CBDCs worth it?
While the general hesitance of most global central banks to adopt an official digital currency indicates that it is a concept still considered a ‘novelty’, the BoL’s analysis of CBDCs puts forward a strong case for their exploration.
Notably, their use in reducing crime, promoting financial inclusion, and expanding elements of the digital economy could help resolve ongoing economic issues.
However, the BoL is also conscious that “some if not all of these benefits may be obtainable through the improvement and upgrading of the existing payment systems.” And yet, if the purpose of central banks is to facilitate the ease of transactions between people, is it sensible to eschew the development of a trend gaining momentum globally?
Whatever the case, placing a CBDC is far from an easy task. Sweden’s Riksbank recently published a report of its progress with the ‘e-krona’. Originally anticipated to be trialled in 2018, the bank’s next estimate for roll-out is the latter part of 2026.
“Simply introducing a complement to cash for retail transactions may not make much of a difference in the economy. Using wholesale CBDCs in cross-border transactions has the potential to raise efficiency,” said Johanna Jeansson, Economist at Bloomberg.
“Employing new digital tools for policy purposes could really alter the macroeconomic playing field. The bigger the step, the more thought it’s likely to require. Expect that to take time.”