Saudi Arabia aims to become a ‘cashless society’

15:01 | 26/02/2019 Cooperation

Saudi Arabia aims to reduce the dependence on cash circulation through the continuous development of the national payment infrastructure to facilitate the transition to an electronic payment environment, said Dr Ahmed Abdulkarim Alkholifey, Governer of Saudi Arabian Monetary Agency (Sama).

Dr Ahmed Abdulkarim Alkholifey speaks after opening the event

This will contribute towards a cashless society, one of the objectives of the Financial Sector Development Program, he said speaking after opening the MEFTECH banking, Fintech and payments conference and exhibition the Four Seasons Hotel, Riyadh.

Presenting the keynote address, Ziad Al Yousef, managing director, Saudi Payments, highlighted the importance of the FinTech ecosystem in the kingdom and digital payment innovation.

The two-day conference and exhibition MEFTECH initiated, in collaboration with mada, the national payment network, and SADAD Payment brings together leading industry experts who will address industry trends and issues around mobile payments in the region, digital transformation in banking, driving cashless payments, artificial intelligence within the e-commerce industry, impact of blockchain on payments and the future of digital currencies.

Dr Alkholifey said: “We are pleased to celebrate the launch of the Middle East Financial Technology and Payments Exhibition MEFTECH in its 15th edition, which is being held for the second year in a row in Saudi Arabia. MEFTECH will introduce new ideas and visions, and the review of techniques that will change the direction of the financial sector, which will pave the way for the adoption of future business models in banks, institutions and individuals to pay and receive payments.

“Over the past two and a half decades, the SAMA has embarked on a process of developing payment systems in the kingdom and enriching them with the latest technical technologies that contribute to the advancement of economic development in our country while ensuring the independence of these systems without being affected by political and international changes. We are proud to have handled over 2.3 billion transactions over the last year alone, with a total financial value exceeding SR50 trillion,” he said.

“In order to keep abreast of international best practice, the Saudi Payments Company was established at the end of last year and was mandated to operate and manage the national payment systems. To play its enabling role to link all service providers, both from the banking sector and financial technology companies, to create a competitive environment between all parties in the interest of the end-user, and to enrich the digital payment sector as a whole. The role of the company will remain as a legislative body working to develop regulatory frameworks, update policies and licenses for the work of these parties, and monitor them to serve the objectives for which they were found, in particular to reduce the cash circulation in all commercial sectors,” he added.

Ziad Al Yousef, managing director, Saudi Payments, in his keynote address said: “In 2018 the payments in the kingdom has seen significant strides in moving towards digital payments as part of the transformation initiatives and in line with Saudi Payments 2021 Strategy to drive the growth of cashless society. During 2018, existing schemes processed more electronic payments than ever before, while new schemes initiatives have laid the foundation for new and innovative payments solution and services. Micro-payments have set the stage with Atheer based ‘micro-payments’ growth reflects consumer adoption of digital payments as part of their daily life which will set the stage for the next innovative payments.”

“Government Ministries and departments have been leading the way in supporting Saudi Payments, and we expect the private sector to follow suit and continue the adoption of digital payments in 2019 and beyond. Saudi consumers are embracing online payments at a faster rate than ever before with a 40% month-on-month growth and in line with the global growth rate of adoption. While bill payments are dominated by select sectors, plans are afoot to engage with non-bank payment service providers to widen the reach and bring more payments into the digital fold. We believe the invoice handling space, and with the introduction of ESAL, will accelerate bill payments in the kingdom.”

Theo Tradearabia