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Technology Driving Saudi Arabia Cards and Payment Industry: Ken Research
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The Cards and Payments Industry in Saudi Arabia involves check payments, payment cards, cash transactions, direct debits and credit transfers. Saudi Arabia is a cash-dominated society where cash is the preferred mode of consumer payments. Most the high-value transactions are shifting to electronic platforms and low-value transactions are completed with cash. Although, the payment cards were introduced in Saudi Arabia majority of the population have a tendency to use these cards for cash withdrawals at ATMs instead of making payments at merchant outlets.
The Saudi Arabian Monetary Agency (SAMA) launched its modified electronic payment system Mada. To improve the penetration of debit cards, Mada cards were issued by local banks that can be used across all ATMs and POS terminals operated by local banks in the Saudi Arabia. Since, the debit cards are co-badged and may be utilized internationally with other payment systems such as GCC Net, Visa, Mastercard, and American Express. Saudi Arabian Monetary Agency (SAMA) has adopted several initiatives to encourage electronic payments. A new electronic payment system was established and was made mandatory for wage payments into bank accounts. The SAMA also launched a modified Saudi Payment Network (Span) that links all ATMs and point-of-sale (POS) terminals across the country to a central payment switch. This network provides authorization, routing, and clearing services for all the payment transactions made in Saudi Arabia.

SAMA encouraged the consumers to improve the utilization of POS terminals as the daily purchase limit per card was increased. All of the card users are provided with a value-added service, and buy with Cashback such as card withdrawals. SAMA launched the Wage Protection System (WPS) where all the employees' salaries are paid directly into their bank accounts. Consumers can withdraw cash and make payments at POS terminals using debit cards. The encouragement and emergence of digital only banks has encouraged electronic payments in Saudi Arabia. Gulf International Bank launched the initial digital-only bank, Meem, in Saudi Arabia that provides online and mobile banking only, without physical branches. website in the cards and payments industry in Saudi Arabia are Al Rajhi Bank, The National Commercial Bank, Riyad Bank, Arab National Bank, The Saudi British Bank, Samba Financial Group, Visa, MasterCard, and American Express.

SAMA introduced an e-payment service known as the SADAD Account that provides a direct link between banks and online merchants. The consumers utilize the online payments service by directly debiting their SADAD Account and transferring the amount to the merchants account. Additional info , Samba Financial Group, Riyad Bank, Saudi British Bank (SABB), AlJazira Bank, Al Rajhi Bank, Arab National Bank (ANB), and Saudi Investment Bank (SAIB) are offering the services of SADAD.

Based on the research report ?The Cards and Payments Industry in Saudi Arabia: Emerging Trends and Opportunities to 2020?, the use of credit cards remains low in Saudi Arabia because of religious reasons, as Islam forbids the receipt or payment of interest. This encouraged the banks to issue a wider range of Sharia-compliant bank cards. All leading credit card issuers in Saudi Arabia offer Sharia-compliant bank cards and banks issuing bank cards are employing promotional offers to encourage credit card usage. The Saudi Arabian government has initiated contactless technology. Riyad Bank has launched the united states?s first contactless cards, and transformed all its card portfolios to contactless technology followed by the National Commercial Bank (NCB). All the remaining banks and credit card providers in Saudi Arabia are anticipated to follow the same pattern on the coming years.

Majority of the banks in Saudi Arabia adopted various ways of market debit and pay later cards. There are several leading competitors and regulations governing the Saudi Arabian cards and payments industry. The Saudi Arabian government has also initiated E-commerce market which is a section of the Saudi Arabia?s cards and payments and is one of the available payment types. E-Commerce Law was made to increase the competitiveness in the e-commerce market in Saudi Arabia, and to enhance customers? rely upon online purchases.

The country is facing high unemployment rate, budget deficit forcing the government to slash most of the perks it offers its citizens, rising petrol prices, inflation are the major factors affecting the consumers disposable income. The cards and payments industry may face a stand still point as a result of country?s crisis but begins off with a slow growth on the coming years. The dynamic and competitive advantages lured by the banks will certainly encourage more opportunities in the cards and payments sector by the year 2020.

To know more, click on the link below.

https://www.kenresearch.com/banking-financial-services-and-insurance/financial-services/cards-payments-industry-saudi-arabia/38371-93.html

Related Reports

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