- Reform plan seeks cashless society
- E-payments could exceed $22bn in next four years
RIYADH: Saudi Arabia wants to achieve an e-payment target of 70 percent by 2030, a banking official told Arab News on Thursday, as the country moves toward becoming a cashless society.
Talat Hafiz, from the Media and Banking Awareness Committee for Saudi Banks, said online or cashless transactions were part of the Vision 2030 reform plan.
The Financial Sector Development Program (FSDP) was one of the initiatives to support the economic growth goals of Vision 2030, he added.
“Basically it is to transfer Saudi society from being heavily cash dependent in buying goods and services to a cashless society using digital and electronic payment,” he told Arab News. “One of the FSDP’s main targets is to increase and improve the percentage of non-cash utilization, from 18 percent in 2016 to 28 percent in 2020. However, the goal will increase of course with the target to 70 percent by 2030.”
Hafiz, in an Arab News column published earlier this month, said the Saudi Arabian Monetary Authority (SAMA) had been encouraging electronic payments and settlements in order to reduce the reliance on cash.
SAMA had introduced a number of e-payment systems in the last two decades to help consumers and institutions, he wrote, such as the Saudi Arabian Riyal Interbank Express and the online bill payment portal SADAD.
Earlier this week Apple Pay was launched in the Kingdom, joining the cashless roster of payment methods available to Saudi consumers.
A cashback service operated by credit card companies, where a percentage of the amount spent is paid back to the cardholder, was introduced last year in Saudi Arabia.
An illustration of how direct debit works, courtesy of the Saudi Arabian Monetary Authority (SAMA).
“All of these efforts collectively from the SAMA side are to reach the ambitious goal of the FSDP.”
Hafiz explained that e-payments saved time and effort and allowed people to access service and goods around-the-clock.
“This is basically why SAMA is very active and now we see SAMA and the National Payment System are responsible and leading (the country) toward a cashless society by achieving the target set by 2030.”
Last February the Amazon-owned Payfort online payments service registered a new company in Saudi Arabia.
According to the “Payfort State of Payments 2017” report, Saudi Arabia and the UAE are the fastest growing markets in the region for electronic payments.
The report estimates that Saudi Arabia conducted $8.3 billion of payment transactions in 2016, showing 27 percent year-on-year growth.
E-payments in the Kingdom are expected to double over the next four years to reach more than $22 billion, the report added.