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Technology Driving Saudi Arabia Cards and Payment Industry: Ken Research
Finance & Investment
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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 may be the preferred mode of consumer payments. Majority of 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 rather than making payments at merchant outlets.
The Saudi Arabian Monetary Agency (SAMA) launched its modified electronic payment system Mada. To increase 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 can be used internationally with other payment systems such as for example GCC Net, Visa, Mastercard, and American Express. Saudi Arabian Monetary Agency (SAMA) has adopted several initiatives to encourage electronic payments. A fresh 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 your payment transactions made in Saudi Arabia.

SAMA encouraged the consumers to increase the application of POS terminals while the daily purchase limit per card was increased. All of the card users are given with a value-added service, and buy with Cashback such as card withdrawals. SAMA launched the Wage Protection System (WPS) where all of the employees' salaries are paid straight 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 offers online and mobile banking only, without physical branches. The best banks 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 referred to 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 total amount to the merchants account. The National Commercial Bank, 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.

According to the research report ? how to fix high cpu usage and Payments Industry in Saudi Arabia: Emerging Trends and Opportunities to 2020?, the use of credit cards remains lower in Saudi Arabia due to 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 charge card issuers in Saudi Arabia offer Sharia-compliant credit cards and banks issuing credit cards are using promotional offers to encourage charge 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 accompanied by the National Commercial Bank (NCB). All of the remaining banks and card issuers in Saudi Arabia are expected to follow exactly 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 various leading competitors and regulations governing the Saudi Arabian cards and payments industry. The Saudi Arabian government in addition has initiated E-commerce market that 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 raise the competitiveness in the e-commerce market in Saudi Arabia, also to enhance customers? read more in online purchases.

The country is facing high unemployment rate, budget deficit forcing the government to slash a lot of the perks it provides its citizens, rising petrol prices, inflation will be 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 will start off with a slow growth over 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, go through the link below.

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

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E MAIL US: Ken Research Ankur Gupta, Head Marketing & Communications ankur [@] kenresearch.com +91-9015378249 www.kenresearch.com

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