Stock - Ramana Kumar FAB
Abu Dhabi's Magnati has ambitions of being something much more than a plain-vanilla payments processor. Image Credit: Supplied

Dubai: Magnati, the UAE based payments processing company, was used to operating behind the scenes, making all those transactions happen smoothly and with extreme precision. As a 100 per cent owned entity within the Abu Dhabi banking behemoth FAB’s portfolio, Magnati had its own space, but away from the limelight.

Then came media reports talking about FAB planning to make a sale of the payments arm, and which was confirmed on February 28 when the Canadian asset management firm Brookfield bought 60 per cent and FAB retaining the rest. So, what next for UAE’s home-grown payments powerhouse Magnati? Ramana Kumar, CEO, gives an insight into what’s offer.

The formation of Magnati as a standalone entity itself happened in April 2021. Was it about creating something new from scratch or where you had a core in place internally and which was then expanded?

As a carve-out of FAB, Magnati was established as a market leader in government payments, merchant acquiring and prepaid cards, as well as a growing e-commerce segment. We are currently positioned among the top two players in the UAE across direct acquiring, prepaid issuing and issuer processing.

In 2020, we served over 30,000 merchants and, to date, have issued more than 2 million prepaid cards and processed approximately $18 billion in transaction value. We have seen double-digit growth in 2021.

FAB has just announced the partial sale of Magnati to global alternative asset manager Brookfield, setting us up for our next stage of growth as a subsidiary of FAB and Brookfield. FAB’s expertise and relationships, coupled with Brookfield’s regional and global presence will provide a platform for Magnati to reshape the payments landscape.

In your factsheet, there is a mention of using AI to drive more targeted promotions and thus help drive traffic for merchants. Isn’t this quite far removed from a behind-the-scenes pure-play payments processing services of the past?

Magnati’s vision is transforming ‘payments into possibilities’. Pure-play payments processing alone isn’t going to help us achieve our vision. Complementing Magnati’s payments processing services are our next-generation payment solutions that use AI and technology to drive value for customers.

Magnati’s ‘Super Surprises’ tool, for instance, expands our offering through the use of AI to analyse and monetise payments data. Using the data monetisation models, we drive footfalls to our merchants and help them increase sales. In essence, we commit to our merchants to deliver a cost/income reduction than a pure-play cost reduction model that relies solely on pricing strategy.

This use of AI and data – is it something that’s already happening in some form?

Magnati currently uses AI to monetise data through our Super Surprises tool. This is something that’s already happening. This solution analyses the spending behaviour of every unique card that touches Magnati’s payment ecosystem to create the right offers, campaigns and discount for the right customers based on our proprietary brand affinity model.

We have worked with many merchants and have launched offers that have multi-fold higher success rates than SMS, emails or even digital marketing.

Cashless payment
Payments processing can bring in a touch of A.I. and other next-gen tech tools to recast industry’s future.

Before the announcement regarding your launch, many in the financial services industry would have said payments processing space may not be room for more players. How do you relate to such sentiments?

Payments and payments processing as an industry is going through continuous disruption. This has created opportunity and space for every company that can break the monolithic systems and build new-gen platforms.

We have built a ‘payment as a platform’ model where our merchants get access to multiple solutions through a single API integration. Any changes or accepting new payment form factors wouldn’t need any technology project investment from the merchants because of the platform.

Similarly, the platform also enables fintechs to work with us and integrate to be accessible by all our merchant fraternity. The platform is a win-win model for all players in the ecosystem.

There’s mention of Magnati playing a key role in government transactions. Currently, are these payment processing transactions split across multiple players?

FAB and Magnati had been at the forefront of providing government payment solutions for many years. We were exclusive providers of Generation 1 and Generation 2 eDirham platform for all federal government payments. We are also exclusive solution providers for Abu Dhabi Pay.

Government solutions are core to our offerings because we are fully aligned to the cashless vision of federal and local governments and understand the requirements better.

In the payments processing business, is there room for all entities to grow? As opposed to gaining market share at the expense of another?

As I mentioned before, there is room for any company that can break monolithic barriers and create value – not only in processing but also at customer-facing solutions, routing solutions, authorisation and any area across the value chain.

There has been a tremendous shift in digital payments locally - credit to initiatives by the UAE Central Bank, regulators and the industry as a whole. Many global payment players launching operations in the UAE is testament to the size of the market and the abundant opportunities available.

There is indeed room for all entities to grow as no one player can capture the market. The key to advancing the sector is collaboration, not competition.

Magnati unlocks new growth opportunities for consumer, government, merchant and institutional clients through our platform and data monetisation capabilities to become a secure, seamless and swift platform of choice.

When do you expect Magnati to reach full operational capability/capacity?

Magnati is a fully operational business. Our comprehensive suite of payment services caters to various client needs. We are operating in an industry where technology disruption happens at a rapid pace and we are able to keep up with that change of pace to offer our clients the latest in payment technologies.