This post was first written back in May 2017. Back then, Ecommerce in the GCC was gaining popularity, finally, after a slow start.
Many of the challenges to Ecommerce in the GCC have been addressed by start-up companies like Fetchr, and large groups like Al Tayer and Chalhoub Group demanding better services from providers.
There are still some barriers though – especially for entrepreneurs or small startup businesses who want to do business through online shopping. One of the biggest issues is still – the Payment Gateway….
Questions to ask yourself when choosing a payment gateway.
Who do I bank with?
Not all banks are equal and it seems like CashApp and Stripe are still a way off in the GCC. In many cases, the payment gateway that you can use is dictated by whether or not your payment gateway has a relationship with your bank.
Stories still appear in the news about Sharia banks blocking online transactions for products and services they deem to be improper. Companies like OSN and Netflix are rumoured to have been blocked by some banks in the GCC.
Do I have a Merchant Account?
The questions we get asked most often by entrepreneurs looking to Ecommerce or Drop Shipping or run a business on the side are … Do I need a license? (in Bahrain this is a Company Registration or CR). And do I need a Merchant Account?
The answer to the second question is – Yes. And No.
If you are a retailer that currently processes credit and debit transactions, then you already have a merchant account.
Having a merchant account may reduce the fees you pay to a payment gateway. As above, it might also limit the payment gateways that you can use.
Some payment gateways in the GCC will allow you to create a sub account without the need for a bond or a merchant account these include Tap
What Ecommerce Platform am I going to use / using?
The main reason why your Ecommerce Platform of choice impacts your choice of payment gateway is that some have existing integrations and some may require costly customisation to accept transactions.
Some ecommerce platforms like Shopify make it very easy to start taking payments, however, as a SaaS product, there are only certain options supported.
Check with your Ecommerce Platform to understand which payment gateways are supported ‘Out of the Box’ or via a plugin. Make sure you ask this question for the country and currency that you want to accept payments in.
What is the base currency I want to work with?
While many customers in the GCC are happy to pay in USD, some won’t. Converting USD to your local currency and getting it into your bank account can also be VERY expensive.
PayPal has some good features which provide customers with a higher level of trust, but getting your money in a country like the UAE currently requires going through Network International with a fee. This is on top of the fees that PayPal charges.
What payment methods do I want to support – Cash on Delivery? Credit Card? Debit Card?
Most ecommerce platforms support cash on delivery (COD) out of the box now, but you need to talk to your fulfilment partner to see if they will handle cash. While customers like COD as an option, it is very inefficient and not good for cashflow.
Credit cards will require a payment gateway. Debit cards will differ by country. In the UAE there is no special system, In Kuwait, debit card payments need to be done through KNET which is supported by some gateways or requires a special plug-in or app. In Bahrain you need a gateway that supports Credimax for credit cards and BENEFIT for debit cards.
How many transactions (Orders) do I expect per month?
This will impact the pricing of your payment gateway. Most have a combination of monthly fees and / or transaction fees. The volume and value of your transactions will determine the best plan to choose.
Some gateways, like Checkout.com will not accept merchants that don’t meet a minimum monthly transaction value.
Can you help me?
Yes we can. Send us an email with the answers to the questions above and we can recommend the best payment gateway for you.