Expansion Plans of Revolut in Morocco for MENA Market Encounters Stiff Competition from Domestic Leader Cash Plus
Revolut Expands into Morocco, Facing Challenges and Competition
Revolut, a European fintech giant with a customer base of 60 million and a valuation of approximately $45 billion, is making its foray into North Africa, specifically Morocco. The company's focus on the Moroccan market is part of its expansion in the Middle East and North Africa (MENA) region, alongside the UAE and Saudi Arabia.
However, Revolut's entry into Morocco is not without challenges. The central bank of Morocco, Bank Al-Maghrib, has a cautious and risk-averse approach to licensing new players. This is evident in the fact that no new foreign banking licenses have been issued in Morocco for over a decade.
To secure regulatory approval and operate fully as a digital bank, Revolut is in the early stages of securing approval from Bank Al-Maghrib. This is a prerequisite to offering a full range of services, including banking licenses planned within two years.
Competition from local players like Cash Plus, a dominant force in Morocco's financial landscape, presents another challenge. Cash Plus offers over 100 services, including bill payments and digital wallets, and processed more than MAD 100 billion (approximately $10.75 billion) in transactions in 2024 and reported revenues of MAD 1.12 billion ($120.4 million). Cash Plus's M-Wallet app now serves over 1 million users, and the company is positioning itself as a "digital bank in all but name."
To differentiate itself, Revolut is employing several strategies. The company has appointed Amine Berrada, former Uber executive, to lead its efforts in Morocco. Berrada will oversee Revolut's strategy and operations as it prepares to apply for a license from Bank Al-Maghrib.
Revolut's strategies also include focusing on securing regulatory licenses, assembling a local team led by a seasoned executive, and leveraging its global digital banking technology and extensive product suite. The company aims to offer innovative, user-friendly digital financial products such as multi-currency accounts, cryptocurrency trading, savings, credit, and investments to capture market share.
Revolut's strength will be in providing lower-cost international transfers, seamless multi-currency management, and advanced money management tools via its global superapp model. However, the company may need to localize its offerings with a Moroccan team that understands the unique needs of local customers and the regulatory environment.
Cash Plus, confident in its ability to protect its market share while thriving as global competitors arrive, is undergoing a significant digital transformation. The company has recently announced that non-residents can now open accounts with just a valid passport. Moreover, Cash Plus has secured a €57 million investment from Mediterrania Capital Partners, FMO, and the IFC to further its digital transformation.
The success of companies in Morocco is likely to dominate the region. With Morocco's upcoming co-hosting of the 2030 FIFA World Cup and hosting of the 2025 Africa Cup of Nations, there is expected to be a surge in demand for digital payments, e-commerce, and seamless cross-border financial services. The digital boom in Morocco makes it a significant test case for how fintechs can scale across North Africa.
In summary, Revolut's challenges include navigating Morocco's regulatory landscape, competing with entrenched local players like Cash Plus, and adapting to local market demands. Its strategies focus on regulatory compliance, local leadership, leveraging global digital banking expertise, and offering a broad fintech product range to differentiate itself and attract Moroccan users. The success of Revolut and other fintechs in Morocco will shape the future of digital finance in North Africa.
[1] Revolut eyes Morocco expansion [2] Revolut appoints Amine Berrada to lead Morocco expansion [3] Revolut eyes North Africa expansion [4] Revolut's strategies for Moroccan expansion [5] Cash Plus's dominance in Morocco's financial landscape
[1] Revolut aims to expand its business in the North African market, particularly Morocco, leveraging technology to offer a comprehensive suite of digital financial products.[2] To secure approval and compete effectively in Morocco, Revolut has enlisted the help of Amine Berrada, a seasoned executive and former Uber leader, to oversee expansion strategies and operations.
