Back in 2005, the niche for non-bank financial products in the MENA region was empty. Some three years later, a dozen major retailers, including LG, Sony, and FCC Nokia, were offering Sharia-compliant chipcard-based loans with installment functionality. Issuing and acquiring have been provided in full by Procco Financial Services, and OpenWay’s WAY4 processing solution.
Procco Financial Services was established in Bahrain by The International Investor (TII). The International Investor, a leading Kuwaiti shareholding company founded in 1992 and listed on the Kuwait and Bahrain Stock Exchange, is a specialised regional financial services group operating in four main sectors: Investment Banking, Corporate Fleet Leasing, Consumer Financial Services, and Loyalty & Payment Solutions.
Through the Payment and Loyalty Solutions subsidiary, TII established Procco Financial Services to lead the fast development of Sharia-compliant payment and loyalty programs. Procco was to provide installment card solutions and transaction processing both to its sister companies and to other institutions lacking back-office support for their financial products.
To achieve those ambitious goals, Procco needed a powerful software platform. "Our first card-based financial products had to be unique and truly Sharia compliant", comments Yzelle Dewet, Senior Partner at TII and CEO of Procco Financial Services. "We searched for a reliable processing solution with flexibility and scalability greater than previously available. Besides, this needed to be attained with minimum effort and in a timely manner".
After thorough consideration of several options, Procco Financial Services selected the WAY4 payment processing software from OpenWay. This platform provided support for all required features: from loan origination, management, accounting and multi-branch support through chip and PIN technology, card, product and transaction management to real-time risk monitoring.
A challenging task was to make retail financing solutions truly Sharia compliant. All Procco products and services had to conform to Islamic law. The system had to allow consumers to purchase Sharia-acceptable goods and make fixed monthly repayments over an agreed time period, without revolving interests or high risks.
OpenWay rose to the beat this challenge and quickly adapted tuned the WAY4 solution to the Sharia rules. "Such a setup would be not possible with many competitors’ or legacy systems. It’s all about setting business rules, that’s our distinctive feature. The WAY4 platform provides more flexibility with less development efforts and this really came to the fore while approaching Sharia-compliance", explains Wim Pardon, the Managing Director of OpenWay Belgium.
On the 5, October 2006, in Bahrain, Procco Financial Services and OpenWay announced their agreement. For the next 3 months, OpenWay implemented WAY4, integrated it with Procco's IT infrastructure, and the new Sharia-compliant retail financing system went live. With few operating personnel, Procco could issue and acquire private label and merchant-branded EMV-chipcards via extensive terminal networks.
TII and Procco initially focused on the Kuwaiti market for Sharia-compliant installment and loyalty programs. By the end of 2008, Procco's merchant base had expanded with large retail networks, such as FONO, Alsayegh Clinic, Zed Motorz, FCC Nokia, LG, AtHome, Maidan Clinic, Dnata, I2, Sony, Electrozan. Another dozen merchants were set to join early in 2009.
According to Yzelle Dewet, "The flexible, powerful and fault-tolerant WAY4 processing system lets us cater to the latest requirements of our clients’ rapidly-developing businesses, introduce popular and unique products and services in the shortest possible time. Using the WAY4 solution is like driving a Formula One car: with proper piloting skills you'll enjoy amazing results".
"It's typical for our clients to be innovators in their markets, developing new and exciting ways to meet their customers' needs," adds Wim Pardon. "That's exactly about Procco Financial Services who has become a true pioneer of cutting-edge consumer financial services in the MENA region".
When making a purchase, a customer can apply for credit, choose the preferred payment scheme and have it immediately applied to the purchase. The multi-functional chipcard for a new Procco customer is personalised and embossed at the same time, thanks to instant-issuing technology.
The WAY4 system also verifies a cardholder’s credibility, taking into account overall debt and monthly payments limit, and other relevant details.
A WAY4 single installation can run multiple businesses in different locations and time zones, making it easy to meet cross-border and cross-industry demands. Procco started the year 2009 by establishing payment processing in Bahrain, initially supporting a co-branded card with a major merchant and a big mall. Procco also plans to launch card-based retail finance operations in South Africa together with a bank and a major furniture chain whose current card portfolio has 1.3 million live accounts.
Industry: Consumer Retail Finance
Project: Loan Management
Project Implementer: OpenWay Group
