Saudi Arabia

ACI’s Take

In light of Saudi Arabia’s Vision 2030 for laying out goals for long-term economic success, there has been a strong government push to promote and accelerate the adoption of digital payments. Driven by strong — and welcome — central- leadership, this permeates all parts of the market. Digital payments acceptance has been chiefly driven by the Saudi Arabian Monetary Authority (SAMA), the kingdom’s central bank, carefully orchestrating and launching the real-time ecosystem in 2021, with mandates for every merchant in the Kingdom to have a digital channel for payments, regardless of size. Thanks to these moves, KSA is well placed to handle an increase in digital payments, as its real-time payments growth has a five-year CAGR of 22.1%. This represents progress in the right direction on the Kingdom’s ambitions to grow into a real-time payments leader and to do so at a faster pace than other leading global real-time markets.

Longer term, this five-year growth figure also puts KSA’s national infrastructure and regulatory environment on a strong footing for real-time payments adoption and innovation. “Sarie,” its new real-time payments system, which was taken by most banks as a mandate from the SAMA, aims to enable banks and consumers to drive usage of digital real-time payments, paving the way for business growth beyond the energy market.

Geidea, the largest fintech company in Saudi Arabia by market share, was the first non-bank institution to be granted an acquiring license by SAMA, and it is highly likely to use the real-time rails. Additionally, KSA’s biggest retail bank, Al Rajhi Bank, launched fintech company Neo Leap, which is keen to rapidly expand within and beyond KSA in the card and real-time market. Network International, a well-established major third-party fintech processor within U.A.E., has ventured into the KSA market, further recognition of the strong opportunities for growth on offer.

With two-thirds of its population under the age of 35, there is opportunity and demand for modernization. The framework and infrastructure are there, and the market has seen exponential growth over the last two years. Financial institutions have been agile and have kept pace with mandates — which they continue to do, including the mandate for open banking adoption by Q4 of 2022. This year, we will see the country step closer towards an economic transformation — financial institutions need the right partners with experience of developing real-time business models around strong, relevant use cases. With these partners, they will unlock ways of both coping with the increased volumes and driving continued innovation.