Expanding into the Middle East and North Africa (MENA) has traditionally been a complex and costly endeavor for global businesses, primarily due to fragmented regulations and diverse banking systems. Addressing these challenges, Dubai-based fintech startup Fuse has emerged as a transformative solution, recently securing $6.6 million in seed funding to enhance its cross-border payments platform.
Founding and Vision
Established in 2023 by George Davis, former co-founder of BVNK, and CTO James Smith, Fuse aims to simplify financial transactions across MENA. The company introduces virtual International Bank Account Numbers (IBANs) to the region—a service commonplace in Europe but previously scarce in MENA. Davis emphasizes, We’re currently the only provider of virtual IBANs in the Middle East. It’s a hyper-commoditized product in Europe, but here, it simply didn’t exist.
Innovative Financial Solutions
Fuse’s core offerings include USD virtual accounts for seamless cross-border transactions and dirham-denominated IBANs for local UAE payments. This infrastructure enables international businesses to manage collections and payouts without establishing a local entity, handling foreign exchange complexities, or navigating intricate licensing processes.
Traditionally, companies faced two primary options for financial operations in MENA: partnering with local payment firms lacking scalability or collaborating with larger cross-border entities that often operate without local licenses, leading to inconsistent partnerships. Fuse positions itself as a fully licensed, infrastructure-grade platform that streamlines money movement across the Middle East using virtual IBANs and local payout rails. This approach allows global businesses to operate in the region without setting up local infrastructure or dealing with regulatory hurdles.
Clientele and Use Cases
Fuse primarily serves businesses from the U.S., Europe, and Asia seeking to establish operations in MENA without the requisite banking setup or licenses. A notable application is for employers of record (EORs). For example, a U.S.-based company with employees in the UAE typically requires a local bank account to pay salaries in dirhams under the correct business name—a process complicated by residency and licensing requirements. Fuse addresses this by issuing USD-denominated virtual IBANs, enabling businesses to fund these accounts and disburse salaries locally in AED directly to named beneficiaries.
Davis elaborates, Customers can create unlimited IBANs in their end customers’ names and make local payments. Those customers don’t need to be residents or have local entities; they can be anywhere in the world.
Currently, Fuse serves over 20 clients, including EORs, remittance firms, cryptocurrency platforms, marketplaces, and payment service providers. Notable clients include DLocal, RemotePass, and platforms like Deel, Airbnb, and Etsy as they expand into MENA.
Regulatory Milestones
In June 2024, Fuse achieved a significant milestone by obtaining a license from the Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority (DFSA). This license enables Fuse to cater to the growing demand for remitting money into the UAE, a market projected to exceed $7.5 billion in digital remittances that year. Davis highlights, Our mission is to make MENA simple and accessible for global businesses, and this fueled our decision to work with the DFSA as its understanding of both local and international payments is essential in realizing our ambition.
Market Context and Future Outlook
The UAE is rapidly becoming a global business hub, recording the second-highest number of new foreign investments globally in 2024. The country is poised to achieve a record $30 billion in foreign direct investment (FDI) inflows, reflecting its favorable business environment and strategic initiatives aimed at attracting international enterprises.
As Dubai evolves into a fintech hub and a top destination for foreign investment, there has been a significant surge in demand for digital payment solutions. The total transaction value within the digital payments market is anticipated to reach $29.75 billion globally. Davis notes, Businesses must have reliable and efficient payment systems in place. At Fuse, we are dedicated to streamlining the payment transaction process, enabling companies to operate smoothly in the UAE market.
The digital payments market in MENA is projected to grow to $9 billion by 2028, a significant increase from 2021. Fuse is revolutionizing how international companies access payments in the UAE, contributing to this upward forecast. By leveraging its advanced cross-border technology, Fuse simplifies the process for employers outside the UAE to pay local talent, eliminating common obstacles associated with international payments.
As the UAE continues to experience unprecedented growth in foreign investment, the need for efficient payment solutions becomes increasingly important. With its unparalleled global reach and deep-rooted local expertise, Fuse is empowering global businesses to thrive seamlessly in the UAE, driving innovation and facilitating economic growth. Fuse is helping payment companies, creator economy apps, employers of record (EORs), and platform businesses to make payments in and around the region without needing to focus on local entities, licenses, and currencies.
