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How PinPay Became a Game Changer in Lebanon’s Digital Landscape

Mobile technologies have changed the business landscape forever. They made product information ubiquitous and have pushed marketing experiences even further. Driven by faster connectivity and better-designed online spaces, mobile devices empower customers by creating digital environments accessible around the clock. Customers can now stream a movie, receive breaking news alerts, and settle banking bills through their smartphones. Given this unprecedented shift in market dynamics, Lebanese consumers have no choice but to embrace mobile commerce. Back in 2011, the Lebanese m-commerce market witnessed the launch of its first mobile payment app, PinPay. Since then, the app has established itself as the leader of its industry and has even paved the way to other similar services. But, how did PinPay eventually come to revolutionize m-commerce in Lebanon in a time where the mobile market is suffering from bad quality of network coverage, data and Internet services?

Hurdles to Mobile Penetration

Lebanon experienced an impressive growth in terms of ICT development in 2012. Following the substantial investments made back then, the Ministry of Telecommunication’s policy had plans to transform the country into a regional digital hub. Four years later, the mobile market remains far from performing at full capacity.

The Internet connection is evidently slow. Internet speed in Lebanon ranks 125th globally with an average of 3.19 Mb/s. That’s attributable to the limitations of the infrastructure currently in use, which is mostly made of copper allowing for a maximum speed of only 8 Mb/s. While Lebanese Internet users wait patiently for the $55 million fiber optic network to be switched on, Lebanon’s Global Competitiveness suffers, with inadequate infrastructure being one of the top problematic factors for doing business.

According to a report by BlomInvest Bank, the cost of accessing the Internet and the speed of the Internet are hurdles to the e-commerce industry in Lebanon. Though the Telecommunication Ministry has planned to slash prices of DSL services and increase service speed in June 2014, some analysts note that the cost of accessing the Internet in Lebanon is four times higher than other countries abroad.

Moreover, some 300 villages in the outskirts of Keserwan, Batroun, Nabatiyeh, and Bekaa still lack access. Rural areas in particular have experienced constant cuts to telecommunications services due to poor infrastructure, harsh weather conditions and electricity cuts.

These factors combined, resulted in a poor mobile penetration in Lebanon. It recorded a rate of 93% as opposed to the neighboring countries’ record of 133% (Telecommunications Regulatory Authority 2014).

Against All Odds

Despite these obstacles, PinPay, a mobile payment and bill aggregation platform in Lebanon thrived. It was able to successfully position itself as the most convenient tool to purchase services and pay different types of bills through its mobile application. Just think of the growing numbers of dual-career couples, single parents and elderly households with various resource constraints. This convenience mitigates to some extent, the relatively high mobile data fees and other costs associated with Internet access. Who would want to disrupt their work, search for a parking space and stand in a checkout line with a long queue to pay a bill?

PinPay has partnered with Bank Audi and Bank Med (5 more in the pipeline), along with the telecom duopolists, transportation services, media companies, educational institutions, along with many other professional services. According to PinPay’s CEO, Mr. Omar Badr, the scope of services gives PinPay more exposure and helps it overcome the challenges posed by user awareness and acceptance of mobile payment. Last year in August, PinPay had a total of 55,000 users, 40,000 of them are regularly active.

From transportation to grocery shopping, PinPay is designed to provide customers with seamless m-commerce experience anytime and anywhere.

Given its leading market position, high growth potential and devoted following of clients, PinPay attracted investments from Middle East Venture Partners, Audi Bank and Bankmed. Most recently, Fransabank announced that it would invest $2.5 million in PinPay, and stop operating the Simba mobile payment application. Fransabank’s $2.5 million stake will increase PinPay’s capital to LBP 13 billion ($8.6 million).

Business News said that five additional banks would join PinPay’s payment service before the end of 2016, further establishing the brand as the leading mobile payment gateway in Lebanon and the region.

Lebanon’s Online Users

According to the Pew Research Center (2015), 92% of Internet users or smartphone owners in Lebanon access the Internet on a daily basis, constituting the highest percentage among countries worldwide.

Age, education and income are three factors contributing to m-commerce readiness in Lebanon. The same source revealed that 90% of Lebanese who access the Internet occasionally or own a smartphone have a high education while only 34% of those with less education do so. Additionally, 92% of occasional Internet surfers or smartphone owners have a high income as opposed to 41% of their lower income peers. Finally, 89% of young people, particularly those between 18 and 34 years of age access the Internet occasionally or have a smartphone, while only 50% of users older than 35 do so.

These findings ring true with other insights published by State of Payments, which revealed that 35% of Lebanese m-commerce adopters are between 18 and 35. Interestingly, two other age groups recorded high adoption rates. Users between 36 and 40 years, along with those older than 51 years recorded 25% each. Additionally, respondents with high income recorded the highest m-commerce adoption rate.

Kicking Off a Cashless Trend

PinPay has undoubtedly played a role in shaping Lebanon’s digital landscape. The room for growth is exponential. Although the infrastructure is still underdeveloped in many areas, mobile has become an integral part of transacting online for many Lebanese users.

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