Considerations to navigate changes in the market landscape

As Covid-19 disrupts the entire payments landscape, what are the considerations for the banks and PSPs in Kuwait going forward? What are the expectations of the customers and how they should innovate in order to thrive in the digital era? 

Payment Industry Landscape | Insights from the Market Leaders | Considerations to navigate changes

• Focus on low hanging fruits: Address the sectors/merchant segments in need of digitalization during COVID-19 (e.g. SMEs, schools, retailers, government, landlords, etc.)
• Reach out to potential new users (merchants and consumers) to create awareness of digital payments. 

• Create trust in digital payments: Essential for banks to invest in creating awareness and trust in their consumers on digital banking and digital payments
• Consider expanding or repurposing existing issuing schemes such as co-branded cards and loyalty programs (e.g. expanding redemption options for airline miles during a period of no travel, new co-branding concepts). Explore new merchant tie-ups for co-branding cards to incentivize card pay

• Evaluate the potential for adjacencies to core offering to increase lifetime value of customers
• The legacy offline and SME businesses in Kuwait were compelled to digitalize during COVID-19. Developing a one-stop-shop offering to address their needs can enhance value capture:
  • Activating solutions such as e-KYC to enable easier onboarding
  • Integrating solutions such as low-cost DIY e-commerce store with a PG
  • Enabling merchants to make data-driven decisions through analytics-based insights

• Handhold merchants in their digital transformation journey with integrated digital payment and affiliated offerings, such as integrated e-commerce store solutions, multi-currency payment acceptance solutions, reporting and data-driven insights through payment analytics.
• Consider assisting merchants with their liquidity needs through the Central Bank of Kuwait’s soft loan package
• Evaluate the introduction of digitally-enabled BNPL solutions to merchants to help boost sales during the downturn

• Evaluate new segments for growth, e.g., multi-currency acceptance, adjacent geographies for expansion, Buy Now, Pay Later (BNPL) solutions for merchants, online insurance for merchants and consumers
• In addition, PSPs globally are offering lending solutions to merchants/customers subject to regulations and their own financial position

• Accelerate digitalization: Evaluate the existing digital banking offerings vis-à-vis the market needs; prioritize the digitalization programs using an importance vs. ease of launch analysis; fast-track the high-priority programs
• Evaluate the challenger bank model, to accelerate digitalization of banking outside the core banking model, targeted at the tech-savvy young population (e.g., LIV Bank of Emirates NBD, Meem of Gulf International Bank, Neo bank of Mashreq, etc.)

• Explore partnerships with banks and telcos to augment their digital payment portfolio. Partnerships with banks can also focus on extending new solutions to the combined customer base, e.g., solutions such as installment-based purchases, and/or BNPL.
• With a focus on SMEs, PSPs can consider assisting them in digitalizing non-payment aspects of their business (e.g., low-cost cloud-based accounting, SaaS solutions) in partnership with relevant vendors .

• Explore partnership opportunities with PSPs, fintech players, e-commerce and other industry participants (e.g., telcos) to enhance offerings with a shortened time to market
• Globally banks have also leveraged fintech partnerships to onboard digital technology solutions for customer-facing operations, digital authentications, Artificial Intelligence-based solutions, blockchain and analytics