Fawry is a textbook growth company banking on low internet penetration, growing smartphone usage, and the Egyptian government’s intent to digitize the economy. The company has taken the first-mover advantage building its network and establishing its brand. We estimate Fawry has a dominating c.47% market share based on the number of POS machines in June 2020. Entry into the Egyptian market has significant barriers, primarily consisting of brand awareness and setting up long-term agreements with suppliers and banks who handle the actual transfer of funds. In addition, a potential new entrant must be able to meet high security expectations, which is an ever-rising bar. Another challenge facing new entrants is setting up the necessary agreements with billing companies including utility companies, and other different service providers including telecommunication companies, transportation companies (ticketing), education providers, insurance providers, etc.
