The opening up of the electronic payment market, which was supposed to break a monopoly that had lasted too long, promised a new commercial era. Last September, the French Competition Council ordered the dismantling of the monopoly of the Interbank Monetary Center CMI), paving the way for a multi-operator model designed to stimulate competition and lower costs for merchants.

« When it comes to electronic payments, we’ve gone from the CMI monopoly to Naps quasi-monopoly »

A « turning point » for a hitherto locked-in sector. But seven months on, the wind of change has run out of steam: the market remains frozen, new players are struggling to emerge, and only one operator, Naps, has truly occupied the space.

Indeed, while the CMI has been forced to transfer its merchant contracts to bank-affiliated payment institutions and cease all canvassing until May 1, 2025, the competitive dynamic has not yet emerged. « We’ve gone from the CMI’s monopoly… to Nap’s quasi-monopoly », says Hazim Sebbata, President of the Association professionnelle des établissements de paiement (APEP) , with a touch of irony .

One step ahead

For seven months, only NAPS, a subsidiary of the M2M group, was able to develop its business. With its electronic payment solution already up and running, the company had a head start. On the other hand, the payment institutions set up by CMI’s shareholder banks – Wafacash (Attijariwafa Bank), M2T (Banque Populaire), Damane Cash (Bank of Africa), Lana Cash (CIH Bank) and Filahi Cash (Crédit Agricole) – were not yet up and running. Held back by approval deadlines and internal technical projects, they were unable to take over from the CMI in time.

The same applies to independent private operators such as Cash Plus, VPS (Vantage Payment Systems), Maymouna Services Financiers and Chari Money, whose acquiring solutions have not yet been fully finalized. As a result, Naps has found itself on its own in this phase, which was supposed to initiate a competitive dynamic.

« It’s a long process. Technologically, most operators are already up to speed. But we still need to finalize approvals from international networks such as Visa and Mastercard, which takes time, » explains Hazim Sebbata. These certifications, which are necessary to process card transactions, are an essential step prior to any commercial deployment.

In addition, for some players, regulatory adjustments and internal configurations are still incomplete. As a result, the market has been on hold, waiting for all players to become technically operational.

A missed opportunity?

An opportunity made all the more strategic by the fact that NAPS had a temporary quasi-monopoly in the field. But according to a number of industry observers, the prices charged during this period failed to create a real air-call. «  The prices offered by Naps were not competitive enough to capture the market on a massive scale », observes one industry professional.

In a context where retailers had no choice but to go through this operator, some preferred to wait rather than commit to conditions deemed onerous. It’s impossible to say whether Naps really capitalized on this window of opportunity: what we do know is that, during this period, retailers did not benefit from more advantageous pricing conditions than in the past.

Yet this was one of the central levers put forward by the Anti-trust Council (Conseil de la Concurrence) in its September 2023 decision: by putting an end to CMI’s dominant position, the arrival of several acquirers was logically supposed to trigger a dynamic of price regulation.

« In a competitive market, every player has a natural incentive to offer better pricing conditions to win market share. It is this dynamic that ultimately drives down costs for merchants, » explains Mehdi Sardaoui, a payment solutions consultant. Yet, seven months after the announcement of the dismantling, this mechanism has still not got off the ground. Merchants, for their part, are still waiting for the emergence of a real diversity of offers, synonymous with better rates.

Structural obstacles

« As soon as an electronic payment is recorded, it becomes a traceable transaction. And this still puts off a large proportion of professionals »

Added to this are more structural obstacles to the wider adoption of electronic payment by merchants. The first is taxation: in the informal or semi-informal sector, the traceability induced by card payments continues to arouse reluctance. « Whether you’re a doctor, pharmacist or craftsman, as soon as an electronic payment is recorded, it becomes a traceable transaction. And that still puts off a large proportion of professionals, » observes Hazim Sebbata.

The second obstacle is the cost of the transaction itself, which remains around one percent for the merchant, a charge that is still a deterrent for those with low margins. Finally, the clearing time – sometimes several days between payment and payment into the merchant’s account – also weighs on the system’s attractiveness. « Ideally, the money should be available immediately or at very short notice, as is the case with some mobile payment solutions, » continues the APEP Chairman.

This status quo is not likely to last, however. According to several industry sources, the majority of payment institutions – whether bank-backed or independent – should be technically ready by the end of the year. « We’re very likely to see a group launch of several operators over the next few months. It will be a massive, almost simultaneous entry into a market that has been stuck for too long, » anticipates Hazim Sebbata.

A scenario that gives rise to both hopes and concerns: while this effective opening-up may finally activate the expected competitive logic, it could also lead to excessive pressure on margins, or even a price war between new entrants.

A market to conquer

And for good reason: the cake to be shared remains modest. The number of active retailers with EFT-POS terminals stands at around 30,000 points of acceptance, a far cry from the market’s real potential. For new entrants to really grow, they’ll need to broaden their acceptance base, by reaching out to untapped segments such as local retailers, self-employed professionals and craftsmen.

« We need to reach out to the 100,000 local retailers, doctors, craftsmen… We’re talking about several hundred thousand, if not millions of potential customers, » insists Hazim Sebbata. This is where the real commercial battle will be fought: convincing a clientele that has never been in the circuit, and that remains difficult to win over without simple, inexpensive and tax-neutral solutions.

As part of this strategy to broaden their customer base, some players are banking on combined offers, combining the acquisition of EFT-POS terminals and mobile banking. This is a way of pooling commercial and technological efforts, but also of meeting an emerging consumer demand. For the obstacles to the adoption of electronic payment – cost, traceability, clearing times – are often the same as those holding back the use of mobile payment solutions.

« If a merchant is convinced to accept card payments, it is likely that they will also accept mobile payments. The two battles are linked », sums up Sebbata. It remains to be seen whether future coupled offers will be sufficiently competitive, simple and adapted to seduce professionals still reluctant to move away from all-cash.

The next few months will be decisive. While the promise of a truly competitive market has yet to materialize, the technical and regulatory conditions finally seem to be in place for a genuine switchover. But for this transition to benefit merchants and consumers alike, competition must be healthy, business models must be sustainable, and above all, trust must be established. Ultimately, the future of electronic payment in Morocco will be decided not only by margins and market share. It will also depend on players’ ability to broaden the base, simplify usage and establish a new digital payment culture.

Written in French by Safae Hadri; edited in English by AngloMedia Group.