10X Startup: DAPI — A FinTech startup to enable better FinTech in the region

FinTech has taken the front stage in the entrepreneurship scene over the past few years, as the number of investments in FinTech startups has exploded to record highs. DIFC has seen a 3X increase in registered FinTech startups since the end of 2018. However, many of these investments and startups are still in their early stages, and are mainly focused on payments, money transfer facilitation, remittances, and other simpler FinTech applications.

Of course, these industry verticals are massively important and potentially lucrative, as apps such as Venmo and CashApp in the United States have proven. Sending money to your friends and family, or paying online without any hassle – who doesn’t like that?

So, how come that these startups have not expanded to the Middle East and North Africa? Well, simply put, they currently do not have access to the infrastructure that would allow them to scale across the region effectively — open APIs allowing connections with banks.

This is the exact challenge that Mohammed Aziz the co-founder of DAPI, encountered when he was launching his first startup, Spendy. Spendy was a FinTech app that would allow users to view all their expenses across all their bank accounts in one single platform, categorised to help you get a better outlook on your personal finances. Unfortunately, it did not take off because the banks did not have any open APIs to plug into the application.

Meanwhile, Ahmed Agour, who is also a co-founder at DAPI was trying to build Dinaro, an investment platform that would allow fractional investment, allowing users to invest as little as $5 into the stock market. Unfortunately, he has no way of allowing his users to top-up directly from their bank accounts while Visa and MasterCard fees were too high, and unfeasible.

Hence, Mohammed Aziz and Ahmed Agour decided to take a step back. If these types of open APIs, which are crucial to the development of a large part of the FinTech industry, do not currently exist at a large scale in the Middle East and North Africa, why do we not build it ourselves? That is how DAPI, short for Data Aggregation and Payment Initiation, was born.

Currently, DAPI employs 7 engineers on top of its two founders, with which the company is building the open APIs that it missed during its Spendy days. And, while regulation in most Middle Eastern countries regarding these types of FinTech applications is still uncertain — aside from Bahrain, which has mandated that banks open their APIs — DAPI says they have made sure that they are building APIs that are at par with UK’s open banking standards; with the expectation that many Middle Eastern countries will look to the West when it comes to the implementation of such regulation.

Following these developments and this approach, DAPI is one of the first open API providers in the sector to be accepted in the Abu Dhabi Global Market’s (ADGM) RegLab, Regulatory Laboratory which provides a controlled environment for FinTech participants to develop and test innovative FinTech solutions.

Moreover, DAPI has been accepted into both government-backed accelerators Plug and Play ADGM in Abu Dhabi as well as FinTech Hive in Dubai, in order to further develop its product through a beneficial testing environment, as well as training and mentorship.

Not long after joining ADGM’s RegLab, DAPI launched their own sandbox, which allows other (FinTech) developers to build their own apps using the APIs of DAPI; and connect with banks accordingly – aiming to solve the initial challenge that they faced.

This might prove especially promising for e-commerce startups, as they have the opportunity to allow internet banking as part of their offerings instead of just credit card payments, in turn avoiding the 2-3% transaction costs that payment providers such as Visa and MasterCard levy.

As the company continues to grow, DAPI looks to maximise its coverage in MENA, as well as provide an instant-payment network and Banking-as-a-Service (BaaS), an ever-popular option for FinTech startups in Western countries, allowing third parties to open up banking services for their clients and acting as an anonymous provider of banking services.