Dubai-based fintech Spotii has launched its shop now pay later platform in the United Arab Emirates, it announced in a statement to MENAbytes. The startup partners with online merchants, allowing them to offer 4 cost-free installments to the customers on their purchases which helps increase the sales and drive conversion of the business and reduce refunds.
Founded last year by former Abraaj executive Anuscha Iqbal and her brother Ziyaad Ahmed (who was previously the interim US CFO at a leading buy now pay later platform Afterpay), Spotii has launched with four merchants on its platform which include local fashion and furnishing brands. The customers of these brands see Spotii as a payment method at checkout.
When asked about why they decided to launch with just four merchants, it had an interesting answer for us, “Four is a very important number to Spotii as a brand. It represents the 4 payments our community can split their payments over. We also publicly announced our company on April 4 (4/4) at 4:44 pm. We announced live customers at 12:34pm (ie 1-2-3-4). We will be announcing new merchants soon. Many asked to delay announcing publicly because of Covid-19.
Spotii claims that it is the first buy now pay later platform in the region to publicly deliver live merchants. Tabby, a Dubai-based startup founded by Namshi’s former CEO Hosam Arab that recently raised $2 million in a seed round has been working with different merchants since the last two months to offer ‘buy now pay later’ as a payment option to their customers, but they haven’t announced the launch publicly yet.
The business model of Spotii, it says, is different from some of the similar buy now pay later services operating across the world as instead of charging the customers, it charges the merchants a platform fee.
“When we say “no interest, no cost, no catch” we really mean it. We earn revenue from the merchants through a platform fee to offer Spotii as a payment method. This is a percentage of the order value, similar to fees the payment gateways charge. Merchants are willing to pay this fee because Spotii installments result in increased sales, better conversion and lower returns,” explained Spotii’s co-founder and CEO Anuscha Iqbal, in a conversation with MENAbytes, adding that they also pay the merchant upfront for the order and Spotii assumes all the liability and fraud risk for the order.
Spotii also has plans to launch in Saudi Arabia and then expand to some other markets in GCC and beyond.
Anuscha, explaining their mission, said that they want to empower customers to enjoy their shopping experience without worrying about excessive costs or hidden fees. “At the same time, we provide business owners with a proven and dynamic conversion strategy that also enhances customer loyalty. We have built Spotii to support the region’s ecommerce ecosystem and grow a vibrant community centred on people and trust.”
“There is a unique win/win proposition here: shoppers benefit from a flexible, fair and transparent budgeting tool, and business owners benefit from a 20-40% sales uplift, better conversion and lower returns,” added Spotii’s co-founder and COO/CFO Ziyaad Ahmed.
May 11, 2020 – 12 PM GMT: Updates in paragraph four after receiving details from Tabby about their service. Also, some details about a specific use case/revenue stream of Spotii were removed on their request (as that particular proposition hasn’t publicly rolled out yet).