Freakonomics Of Middle East. Decimal Factor paves the road to UAE, Bahrain.


Khalid Al Rumaihi CE, Bahrain EDB, spoke very eloquently at the AFS Fin-tech Event in Bahrain. In general, he spoke about GCC’s readiness for Fin-tech, but also about the direct GCC relationship between spend and oil prices. In 2008 when oil prices dropped, the spending crashed. However, in 2014 when oil prices recovered, the spending went back up by 400 %. The prices dropped again after 2015 and so did the spend. It is simple and very clear, spend is directly proportional to oil prices in GCC i.e. aggressive when the oil prices are up and regressive when they are low. Now, with the cost of technology for oil extraction at its lowest, the chances of seeing oil prices at the $80-$100 mark, is highly unlikely. Therefore, all GCC are rethinking their strategy to revenue. To add to their oil price problem, the world has not helped either – Brexit, China slowdown and the US Presidential election, have kept the sentiments for a recovery of oil prices very low. On a separate note, 86% in MENA do not have bank accounts. Ecommerce will be 20 billion by 2020 in the Arab world. GCC nations have no choice but to open up banking, even if government owned institutions will be affected. Also, kingdoms and countries will have to rethink subsidies as they will most likely start to disappear. We will see tax as a more regular source of income in GCC. VAT is already being implemented later this year, income tax and others will be next to follow. I believe that it is not a case of if but when, governments start looking at taxation as a regular source of income for their administrations. I would not be surprised if that is sooner than we think. But of course, not all is bad in GCC. With the excellent infrastructure these countries have built during their good times and having a bold vision for the Middle East, their governments have been able to build real and vibrant economies. They have the best of roads, hotels, restaurants and in general, a robust infrastructure that many living in East and North Africa would like to call home. They have also created an environment which attracts talent from the west, who want to stay and work in the Middle East. There is no fear that these countries will fail. They will not, even if there is a further crisis in oil prices. However, they will now have to get used to living in the real world and no longer expect their rich old grandfather “Oil,” to keep paying and funding growth.

Dr. Mario Thaten, Digital Banking Practice Leader, McKinsey & Company, had a suggestion for banks in Bahrain. He said all banks in the world and especially in ME, have no choice but to follow the three R’s:

  1. Resilience (lean and mean operation)
  2. Renewal (10 to 100 times closer to the customer )
  3. Re-invent (look at Fintech to reduce cost)

Regulators are keen to make change, the Governor of Bahrain said he will launch directives to help and make it easy for crowd funding and alternative Fin-tech to be in Bahrain.

I was representing Decimal Factor in Bahrain through an invitation from Sunil Madtha, Sr Clients Relationship at Arab Financial Services Compnay. I was also delighted to meet with B Chandrasekhar, AFS’s Chief Executive Officer (in pic top left) and Hassan Mayassi,  AFS Processing Services  CEO UAE & Group Director. Decimal Factor is currently in talks with AFS, Accenture & DIFC (Fin-tech Hive) in UAE, to launch in Dubai (UAE) and Bahrain by June this year and we believe, the Middle East will be our next big market place after success in the US and UK Markets.

Freakonomics is the new economics and if there is anything one must read in the above article, it is the opportunity for banks and alternative finance players to disrupt the Middle East in a positive way.

The Middle East will come out stronger and more successfully from the oil crisis.


Manoj Karkhanis.

Decimal Factor’s visit to Mexico.


I had a thrilling time in Mexico where I was able to explore an untapped alternative finance market and build new bridges which will last for a long time. I am truly excited about what I witnessed in Mexico and I am honoured to have been selected to be apart of the United Kingdom’s FinTech delegation to Mexico.
After visiting the FinTech hub in Mexico I had a very productive meeting with the regulators there and had the privilege to participate in a Q and A session (Click to view) which they had put on. This was a great introduction to how the Mexican FinTech scene is set up and enabled me to create strong partnerships. In the Q and A session I was also able provide a few tips and share some of the knowledge I have gained while working in the FinTech sector. I was also invited by the Department of International trade to deliver a key note speech at the Pay Expo (Click to view)Americas.  This was a fantastic experience where I was able to touch upon a few key areas of change that we will be noticing not just in Mexico but also around the world. There are already many great products out there on the market. Now a days there are smart terminals and smart watches. We are constantly seeing developments in the payments sector. But the use of cash will still be prominent. This is because it is down to the consumer to choose how they would like to deal with payments. It is the role of companies like Decimal Factor to use all of theavailable means to make an all round better experience for the consumer and if we can provide a WOW factor, then that is a plus!
I also managed to touch upon a few more developments that will happen in the the future. Smart contracts. This is a phenomena which has already got the banks and the entire finance industry excited. This form of alternative
finance and alternative business will soon loose the adjective and will just become business and finance. This is a form of block chain which will make contracts paperless and transactions T-zero. After learning about block chain  (Click to view) in Las Vegas I firmly believe that within my lifetime I will be able to see transactions happen in
0 days. This will be a true feat in the payments sector.
I was asked a very interesting question during the session with the regulators which made me think of how effective the FCA is here in the United Kingdom and what Mexico can learn from the UK in terms of regulation. At the moment Mexico has three different regulators. The FCA however, has a number of different bodies working under one umbrella organisation. This is a very beneficial system as once you are regulated by the FCA a company can begin as a credit broker and grow into a wealth manager as they will always have one regulatory number where they can then apply for many different licences. This is something that will definitely help businesses in Mexico just like it has helped businesses in the UK.
What has Decimal Factor learned from it’s experience in Mexico ? What are Decimal Factor’s plans for Mexico?
Decimal Factor will launch it’s Mexican based company and have operations live in Mexico by May 2017. It will build a team of core Funding Specialists under the leadership of our Managing Director in Mexico, Gerrardo Saldivarto and Mik Basi our Chairman- South Americas. Decimal Factor (Mexico) will help our USA operations. This is to help reach out to the Spanish speaking community that resides in the US. This foundation will enhance our capabilities to build for the future. It is our
aim to launch our Cash Advance Programme successfully in Mexico by 2018.
Mexico will be alongside USA, UK, UAE, India and Singapore when Decimal Factor launches it’s new alternative finance platform, using the latest technology built on BlockChain and using new age Smart Contracts which Decimal Factor will be launching by 2019.

The  trip ended with a lunch meeting with Mauricio Sulaimán the President of  WBC (World Boxing Council). He had great things to say about Great Britain Boxing and also about the potential India has in Professional Boxing.

You may remember my association and love for boxing when Decimal Factor sponsored  Great Britain’s Lion Hearts V/s Russia at The Brewery in London. (Click to view)

Manoj Karkhanis.

Why is Vocalink so important to UK Consumer?

Last year Vocalink processed 11 billion transactions,amounting to £6 trillion.

In United Kingdom;

  • Vocalink processed 90% of salaries.
  • Processed 70% of household bills.
  • Processedalmost 100% of all state benefits.
  • Almost every person in the UK benefits from Vocalink platforms.
  • Vocalink manages faster payments, BACS and Direct Debit systems.
  • Vocalink connects almost 70% of all ATMS in the United Kingdom.
  • Vocalink is synonymous with real time payments.

Shouldn’t Britain’s most important payment platform be owned by the Bank of England or be under supervision of the treasury?

There are two different perspectives:

  1. The government should not interfere with the payments business and should allow open competition to prevail.
  2. The government should step in and protect the most important payment network of this country, control it and run it …
Faster Paymenthas forever changed the way we work. Payments before/after Faster Payments are two different eras, just like a calendar is remembered in BC & AD. Such important work is carried out by a consortium of banks that created Vocalink and indeed made it one of the best payment systems in the world. Of course the banks don’t want to own it, they want to monetise their efforts as they have shareholders. However,it is beyond my comprehension as to why the government or the treasury will not step in to own the most important payment system that touches the lives of every British citizen and almost all of the UK’s residents.
As a global payments citizen, a citizen who believes in open competition and the prosperity of the world markets, Istart liking the idea of Vocalink being under the MasterCard umbrella. Undoubtedly, MasterCard is one of the better companies that have the abilityto take this platform around the world.It also has the prowess to put the impetus and finances forward to ensure Vocalink’s growth worldwide. Make it as important to the world as much as it is important to us here in the UK. As the MasterCard advert says, “Some things are priceless and for everything else, there is MasterCard “ The question for me, you and our government is simple;is this payments network priceless for us or are we going to use MasterCard?
CMA acting chief executive Andrea Coscelli said: “The Link ATM network provides an essential service for millions of customers. It’s important that Link has a good choice of providers when it comes to supplying the necessary infrastructure so it can take advantage of the opening up of payment systems to competition.” However, it’s not just about thechoice of providers for Link ATM. It is also about the unified payments in UK. PayByBank app is a technology platform owned by Vocalink, i.e. Vocalink is very close to enabling UK bank account holders make a direct payment to merchants without the need of any scheme like MasterCard, Visa, or any Credit and Debit cards but, by simply using their bank app on the phone. I think CMA should also question handing this capability to MasterCard. In future say the Bank Of England wants to go cashless or introduce a Crypto or get on Block chain, it is this backbone of unified payments that will be very important. Payments don’t makea lot of money but can drive economy and be the backbone of major government decisions.

Should we put our British interest first or be firm on our principle of being fair and open to business and competition? Should we give away the strongest payment network to a private company?

I am interested to hear any view points on this issue but more importantly on the below;

  1. The government should not interfere with the payments business and should allow open competition to prevail.

  2. The government should step in and protect the most important payment network of this country, control it and run it …

If you had a vote would it be 1 or 2?

Type 1 in comment if you believe in the first viewpoint and type 2 if you believe in the second viewpoint.

    Manoj Karkhanis