Visualizing and Tracking Egypt's New Currency Regulations

What fascinates many—including the flock here at Pagos—about the payment space is the fact that it’s often an interesting mix of technology and finance. Furthermore, when you explore it from a global perspective, payments become a mix of country history and regulations, current and past politics or policy decisions, and macroeconomics. Case in point, our blog about changes in Argentina’s tourist exchange rates has been very popular. On that theme, below is another example of what you might hear in the news and how your payments are impacted as a result.

In October 2023, Egypt’s central bank introduced significant regulations on the use of Egyptian-issued credit and debit cards. Aimed at directly curbing Egyptian purchases in foreign currencies both at home and abroad, these changes have caused immediate ramifications for any global business accepting transactions made with cards issued in Egypt. Changes that impact your payments stack like these happen all the time either because of network rule changes, processor implementation upgrades, local policy/regulatory decisions, or actual global macroeconomics. It is often very hard to detect the initial impact of such regulatory changes, identify how it impacted your business, and decide how to best monitor the impact of your response strategy.

In this blog post, we'll explore the evolving regulatory landscape in Egypt and delve into how Pagos' data visualization tool, Peacock, can empower businesses to visualize and navigate the impact of these changes on revenue, and even detect the changes as they are happening with Canary.

Understanding Egypt's New Currency Regulations

To understand how the new regulations in Egypt may impact your business, we must first explore why Egypt’s central bank has deemed such regulations necessary. Since March of this year, the central bank has kept the exchange rate of Egyptian pounds to US dollars consistent at approximately 31£ to $1. Because this official exchange rate is significantly lower than the black market exchange rate of 40-41 Egyptian pounds to the dollar, some people have seen an opportunity for profits through speculation. For example, officials have identified a trend of individuals buying foreign goods with cards at the fixed, lower exchange rate, then reselling them on the black market at the higher rate; similarly, debit cards have been excessively used to make cash withdrawals from foreign countries with the more favorable exchange rate.

To curb a growing foreign currency drain, Egypt’s central bank issued the following regulations in back-to-back weeks:

• Suspending the use of Egyptian pound debit cards outside of Egypt

• Limiting domestic purchases made in foreign currencies with Egyptian credit cards to the equivalent of $250/month 

It’s important to note that Egypt’s central bank could not exempt any individual business or vertical from these regulations, so all businesses are now impacted.

Visualizing the Impact of New Regulations

One notable consequence of these regulations is a decrease in approval rates for cards issued in Egypt. Identifying this impact on your business is crucial to designing a response strategy for limiting revenue losses and supporting your customers in the market. Fortunately, Peacock by Pagos—our data aggregation and visualization tool—provides your business with everything you need to see exactly how transaction volume and approval rates associated with Egyptian-issued cards have changed since regulations went into effect in mid October. 

To view this in Peacock, look no further than the Home dashboard. By simply filtering this dashboard for only those transactions made with cards issued in Egypt, we immediately see how turnover and approval rates have significantly dropped in the last month. Even more interesting, that approval rate drop appears for all processors.

The next step would be to confirm if there are specific segments of your Egyptian customer base that aren’t impacted. To do so, you could filter other charts and dashboards in Peacock for transactions made with cards issued in Egypt. For example, the Card Brands dashboard includes a chart called Card Brand Approvals; based on the data, it’s clear these regulations have negatively impacted approval rates for all card brands.

Based on our own data analysis across all our customers, we can confirm that approval rates for Egyptian-issued cards dropped after the implementation of these regulations for all card brands, card types, presentment currencies, and processors. With this knowledge, you can now design a calculated business response.

Taking Action In Response

Taking action to assist your Egypt-based customers and limit impact on your bottom line can look different depending on your business model. In general, you’ll want to speak with your partners and your operational teams to design a response together and track how your actions impact approval rates and sales over time. With Peacock, you’ll know accurately what the impact to revenue is, but here are some examples of how you might respond over time to support your customers:

• Design checkout messaging on your site that alerts new customers to avoid using cards issued in Egypt

• Proactively contact long standing or recurring customers that their services may be impacted if they have an Egyptian-issued credit or debit card saved on file

• Educate your customer support teams on how to correctly respond to questions from Egypt-based customers

• Work with your payment partners and vendors to determine how you can still support new and existing customers

  
  

Monitoring the Impact of Your Actions

Peacock not only helped you visualize how the new Egyptian regulations impacted your business, but it can also be a tool for monitoring how any actions you’ve taken move the needle. For example, you can apply the Customer Country filter to the Payment Method dashboard to only show transactions made by customers in Egypt (irrespective of the payment method they’ve selected); this way, you can track how the payment method mix for your Egyptian customer base changes over time now that credit and debit cards are a less reliable option. Keep in mind, you can use Peacock in this manner for monitoring any country’s regulation changes.

If you’d rather a less manual method for monitoring your data, consider our Canary product. Canary is an automated data monitoring service that keeps an eye on your aggregated payments data and alerts you when things change in unexpected ways. You can customize your own triggers in Canary, telling it which customer segments you’re most concerned about and which metrics you want alerts for. For example, you can create a trigger in Canary to monitor approval rate for all your key markets that will alert you when that approval rate decreases below where it’s been since the regulation-related dip. Our alerts will include the details around which country any changes have occurred in and the precise card type or merchant ID. This way, you’ll get automated alerts when your response strategy starts paying off.

Payments Monitoring Made Easy

In a dynamic payments landscape, businesses need tools that empower them to adapt swiftly and make informed decisions. Pagos' Peacock product emerges as a valuable ally, offering a comprehensive view of payment data that allows you to not only identify the impact of new regulations, but track how successful your response strategy is. Furthermore, Pagos also offers a data anomaly detection service known as Canary, which you can configure to alert you to unexpected changes in approval rates, transaction volume, and more for impacted customer segments.

Stay ahead of the curve and confidently navigate changing payment landscapes by leveraging Pagos for insightful data monitoring and visualization! Contact us today to learn more.