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Saudi Arabia Expands E-Payments Market

Saudi Arabia expands its electronic payment services market (Asharq Al-Awsat)
Saudi Arabia expands its electronic payment services market (Asharq Al-Awsat)
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Saudi Arabia Expands E-Payments Market

Saudi Arabia expands its electronic payment services market (Asharq Al-Awsat)
Saudi Arabia expands its electronic payment services market (Asharq Al-Awsat)

Paymob, the leading financial services enabler in the Middle East, North Africa, and Pakistan (MENAP), announced that it has secured Saudi Arabia's Payment Technical Services Provider (PTSP) certification, making it fully operational.

Paymob established its office in Riyadh in April 2023 and is dedicated to having a solid local presence in the Kingdom.

There are over 1.14 million microbusinesses and SMEs in Saudi Arabia, with a growth rate of 12 percent per annum.

As outlined in Vision 2030, the Kingdom aims to increase SME contribution to its GDP from 20 percent to 35 percent while achieving 70 percent non-cash transactions by 2030.

Saudi Arabia is also experiencing rapid e-commerce growth and a year-on-year transaction increase of 65 percent.

The growth presents a significant market opportunity for a digital payments enabler like Paymob with a history of providing localized, cutting-edge solutions.

Since its inception in 2015, Paymob has set out to digitize SMEs by enabling them with the most comprehensive payment acceptance methods in MENAP.

Its omnichannel gateway offers over 40 payment methods. It empowers over 200,000 SME merchants to manage and scale their businesses by giving them access to innovative financial services not readily available in emerging markets.

Islam Shawky, Co-founder and CEO of Paymob, said, "Obtaining the PTSP certification in Saudi Arabia is a significant accomplishment for us."

It reflects Paymob's commitment to its expansion plans in Saudi Arabia while serving merchants and entrepreneurs across the Kingdom to support their growth with cutting-edge financial technology solutions.

In April, the Saudi Central Bank (SAMA) announced that the share of electronic payments in the retail sector reached 62 percent of total revenues, including cash, in 2022, surpassing the 60 percent target set out by the Financial Sector Development Program (FSDP), one of the leading programs of Saudi Vision 2030.

Notably, SAMA seeks to accelerate the digital transformation towards electronic payments, support payment infrastructure, and encourage its adoption.

SAMA's strategic plans for the payment sector made this achievement possible by reducing reliance on cash considerably.

SAMA's goal is to increase electronic payment share to 70 percent by 2025 and to create synergies among government and private sectors to embark on a new era of digitalization for payment systems.

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Iraqi Central Bank Discusses Foreign Transfer Mechanisms with US Delegation

The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
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Iraqi Central Bank Discusses Foreign Transfer Mechanisms with US Delegation

The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)
The Governor of the Central Bank of Iraq meets a US delegation in Baghdad. (Central Bank of Iraq)

Governor of the Central Bank of Iraq Ali Mohsen Al-Alaq held talks with Steve Lutes, Vice President of Middle East Affairs at the US Chamber of Commerce and Chairman of the US-Iraq Business Council mechanisms for international trade and Iraq’s shift to fully utilizing correspondent banks for foreign transfers. 

Sunday's discussions in Baghdad follow the US blacklisting of 14 Iraqi banks - half of the country’s total banks - on suspicions of involvement in money laundering and transferring funds to Iran and Syria. The move has prevented these banks from conducting dollar transactions.

According to a statement by the Central Bank of Iraq on Sunday, the meeting, which was also attended by the Directors General of the Investments Department and the Banking Supervision Department, addressed “banking and economic relations” between Iraq and the US. They covered a visit by a Central Bank delegation to Washington in April, during which the delegation will meet with officials from the US Chamber of Commerce and American companies.

The two sides also touched on US companies’ interest in investing in Iraq’s energy, infrastructure, and advanced technology sectors, as well as opportunities arising from Iraq’s current security stability.

Al-Alaq emphasized the Central Bank’s role in supporting Iraq’s economic growth and pledged full support to global firms, including US companies and banks, looking to invest in the country. He stressed the importance of diversifying investment sectors to bolster economic development.

Since the beginning of 2023, the Central Bank of Iraq has implemented a monitoring system for dollar transactions through a specialized platform, which was designed to regulate financial transfers by Iraqi banks and provide proactive oversight, replacing the US Federal Reserve’s previous practice of auditing daily transfers. However, the Central Bank decided to discontinue the platform at the beginning of 2024.

The closure triggered significant withdrawals of deposits by individuals and companies, amid concerns that the banks holding their funds might face bankruptcy due to non-compliance with the Central Bank’s requirements and the US Treasury Department’s standards.

According to Central Bank data, the total volume of deposits in Iraq’s commercial banks fell to its lowest level in 22 months, dropping to 123 trillion Iraqi dinars in November 2024, compared to 127.5 trillion dinars in October.

Between June and November 2024, deposits decreased by 7 trillion dinars, reflecting a continued trend of declining savings in the banking sector over recent months.