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Digital Payments Revolution Boosts E-Commerce Opportunities in Saudi Arabia

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Digital Payments Revolution Boosts E-Commerce Opportunities in Saudi Arabia

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For an extended period, the Saudi Arabian economy predominantly relied on cash, stemming from a culture rich in traditional local markets and negotiations.
This preference, once reinforced by a lack of trust in banking systems and the absence of regulatory frameworks for online transactions, is rapidly evolving.
With two-thirds of the kingdom’s population being under the age of 35, and the country ranking third globally in smartphone usage, Saudi Arabia is undergoing a swift transformation in payment preferences.
This shift not only reshapes consumer behavior but also serves as a pivotal element in the broader narrative of digital transformation, paving the way for a more efficient system for e-commerce and logistical services.
In a society where cultural traditions once dictated a preference for cash transactions, the Kingdom now embraces the digital revolution.
This transformation is evident in how both consumers and merchants swiftly adapt to online financial activities.
Prior to the coronavirus pandemic, cash-on-delivery was the preferred method for e-commerce transactions. However, today, digital payments have seen a significant surge in adoption, propelled by a large number of tech-savvy youth and the impact of the pandemic.
Digital Payments
In 2020, digital payment transactions in the Kingdom surged by 75%, while cash withdrawals from ATMs experienced a significant decline.
The reality is that this shift towards digital payments is not merely a matter of convenience or a response to global trends. It is a strategic move aligned with the Kingdom’s national transformation plan, “Vision 2030,” aiming to accelerate the digital economy and increase cashless transactions.
Government initiatives, such as the introduction of the SADAD system, and the efforts of the Saudi Central Bank to regulate and unify the digital payment sector, have streamlined electronic payments and enhanced trust among users.
This regulatory framework has played a crucial role in encouraging the adoption of online payment services, making digital transactions more secure and reliable.
Payment Applications
The e-commerce sector in Saudi Arabia, expected to surpass $13.2 billion by 2025, directly benefits from the growing trend towards digital payments.
With consumers becoming more comfortable with online payments, there has been a surge in demand for e-commerce, exemplified by a 60% increase in online shopping from 2019 to 2020.
The emergence of mobile payment applications such as Apple Pay, Google Pay, and various local apps has facilitated this shift, making smartphone payments more convenient than ever.
This increasing convenience in digital transactions not only enhances consumer comfort but also drives the expansion of the e-commerce sector. It also brings about an innovative approach in the logistics services domain to keep pace with this growth.
The rapid evolution of payment methods within the Kingdom represents a transformation reshaping the landscape of e-commerce and the logistics sector, particularly in the realm of order delivery.
Reducing cash transactions simplifies the delivery process, minimizes errors, enhances efficiency, and simultaneously supports environmental sustainability goals by reducing paper usage and improving delivery routes, resulting in decreased fuel consumption and carbon footprint.
One of the prominent challenges traditionally faced by Saudi Arabia in delivery services has been the absence of a clear and unified system for delivery addresses.
The lack of postal codes and precise addresses often leads to reliance on phone calls and detailed descriptions from customers, adding complexity and potentially causing delays in delivery operations.

To overcome these challenges in order delivery, leading logistics companies in Saudi Arabia are increasingly turning to the adoption of innovative technologies.
The Internet of Things
Nowadays, global positioning systems and Internet of Things (IoT) systems, along with advanced transportation management systems, are being utilized to achieve an immediate and smarter vision in order delivery.
These technologies not only enhance route planning and delivery efficiency but also ensure the fulfillment of the increasing demand for e-commerce through equally sophisticated logistical solutions.
The integration of these technologies serves as a testament to the industry’s commitment to overcoming fundamental challenges in delivery, especially within the rapidly evolving digital landscape.
Looking to the future, the potential use of drones and self-driving vehicles is also a fantastic means to enhance delivery services.
These advanced solutions could revolutionize the efficiency and speed of delivery operations, especially in hard-to-reach areas or during peak hours.
Meanwhile, Saudi Post has embarked on an ambitious initiative to provide an address for every workplace or residence.
Individuals or companies registering their addresses receive a short code consisting of 8 characters (4 letters and 4 numbers), creating a unified and comprehensive address system for all regions, cities, and villages in Saudi Arabia.
The current challenge lies in encouraging e-commerce retailers to include the new addresses in their customers’ orders for faster and more standardized adoption.
Despite the challenges, companies in the Kingdom are expanding their local networks and exploring on-demand delivery tools, allowing customers to specify delivery times and locations.
However, maintaining a balance between service quality and cost management remains a continuous and fundamental challenge in this sector.
Innovative Solutions
Saudis are anticipating a future where synergy between online payment methods, e-commerce, and logistics services in the Kingdom becomes more integrated and advanced.
The widespread adoption of digital payment methods is expected to drive an increase in e-commerce activities.
This evolution extends beyond enhancing current systems; it creates both opportunities and new challenges in the logistics landscape.
In conclusion, the shift towards digital payment methods serves as a catalyst for a broader transformation in the sectors of e-commerce and logistics in Saudi Arabia.
The future will witness a rise in seamless digital transactions and efficient logistical solutions, fostering the growth of the e-commerce sector and contributing to the broader economic objectives of the kingdom.
As Saudi Arabia continues to embrace digital transformation, the future of e-commerce and logistics appears not only promising but also integral to economic growth and diversification in the country.

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Toufic Sultan Recalls to Asharq Al-Awsat Mutual Hatred between Hafez al-Assad and Yasser Arafat

Arafat and Assad during a celebration of the Libyan Revolution in Tripoli in 1988. (AFP)
Arafat and Assad during a celebration of the Libyan Revolution in Tripoli in 1988. (AFP)
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Toufic Sultan Recalls to Asharq Al-Awsat Mutual Hatred between Hafez al-Assad and Yasser Arafat

Arafat and Assad during a celebration of the Libyan Revolution in Tripoli in 1988. (AFP)
Arafat and Assad during a celebration of the Libyan Revolution in Tripoli in 1988. (AFP)

Journalists sometimes hear shocking statements—ones they lock away in their memory, fearing their repercussions. Some are too violent, too damaging, or too costly to repeat. Others risk swift denial from those who made them.

That was the case in late January 1987, when Kuwait hosted the fifth Islamic Summit.

Among the leaders in attendance were Saudi Arabia’s King Fahd bin Abdulaziz, Syrian President Hafez al-Assad, Lebanese President Amin Gemayel, and Palestinian Liberation Organization (PLO) Chairman Yasser Arafat.

I had requested an interview with Arafat, and he agreed to meet. After an exchange of pleasantries, he delivered a series of startling remarks.

“What’s happening in Beirut?” he asked.

“You know the country is grappling with the aftermath of the war of the camps,” I replied.

“No, Ghassan,” he shot back. “This is not the ‘war of the camps.’ The real name is the ‘war on the camps.’ It was personally ordered by Hafez al-Assad. Regrettably, the Amal Movement, led by Nabih Berri, is carrying out the decision, aided—unfortunately—by the Lebanese Army’s Sixth Brigade.”

Arafat must have noticed my surprise at his bluntness, because he raised his voice in anger.

“Assad is trying to finish what Ariel Sharon started in the 1982 invasion but failed to achieve. This is a continuation of Sharon’s mission to eliminate the PLO,” he charged.

Veteran Lebanese politician Toufic Sultan speaks to Asharq Al-Awsat. (Asharq Al-Awsat)

Assad: A Souk Al-Hamidiya merchant

I pointed out that his accusations were grave, targeting Syria’s head of state. His frustration only grew.

“Assad is not Syria’s president,” Arafat fumed.

“He is a merchant from Souk al-Hamidiya. If only he focused on reclaiming the Golan instead of blocking Palestinian independence to please America and Israel. Mark my words: time will prove me right. Hafez al-Assad does not recognize Palestine, nor Lebanon. He loathes Iraq under the guise of hating Saddam Hussein.”

Stunned, I listened as he went on.

“What they call an ‘uprising’ within Fatah is a conspiracy orchestrated by Assad and funded by [Libyan leader Moammar] al-Gaddafi. Assad’s only dream is to turn the Palestinian cause into a bargaining chip and to dominate Lebanon.”

As Arafat’s anger subsided, our conversation shifted to other topics.

A few days ago, I met with veteran Lebanese politician Toufic Sultan—a man who carries the collective memory of two cities. Born in Tripoli, he has also witnessed Beirut’s political twists and turns, having been a close associate of Kamal Jumblatt and his son, Walid, as well as former Prime Minister Rafik al-Hariri and his son, Saad.

He maintained ties with Arafat and participated in meetings with Assad and other Arab leaders. His recollections are rich with pivotal moments, particularly from his time as deputy leader of the National Movement, a coalition of leftist and nationalist forces led by Kamal Jumblatt.

Rocky start: Assad and Arafat’s strained relationship

Arafat’s relationship with Damascus was troubled from the outset. After a bloody internal dispute within Fatah, he was briefly detained in Syria, where the defense minister at the time was Hafez al-Assad.

Following the violent clashes between Palestinian factions and the Jordanian army in 1970, Assad came to view the presence of armed Palestinian groups as a source of chaos. This belief shaped his stance toward Arafat and the Palestinian resistance movement for years to come.

Assad grew uneasy when Palestinian factions relocated to Beirut and forged a broad alliance with Lebanon’s leftist parties and nationalist forces. He closely monitored Arafat’s rise as the dominant player on the Lebanese scene.

Despite Syria’s attempts to control the Palestinian file, Damascus struggled to rein in Fatah’s overwhelming influence and Arafat’s growing stature. His power extended to Lebanon’s southern border with Israel, where he effectively held decision-making authority.

Speaking to Asharq Al-Awsat, Sultan recalled: “Hafez al-Assad never truly respected the idea of Palestinian resistance. I heard it from him directly and from those around him. His prevailing view was that there was no real resistance—just armed groups operating in coordination with intelligence agencies. The divide between Assad and Arafat was clear from the start.”

Sultan recounted an episode that underscored the deep divide between Assad and Arafat.

“One day, Assad told Arafat that Palestine did not exist—it was simply southern Syria. Arafat fired back, saying there was no such thing as Syria, only northern Palestine. There was an attempt to mask the exchange with humor, but the reality was that Assad genuinely viewed the issue through this lens,” Sultan said.

He explained that several Arab regimes sought to control the Palestinian cause, hoping to benefit from it without bearing its consequences.

“From the Baathist perspective, both in Baghdad and Damascus, there was a belief that the issue was too significant for the PLO to unilaterally determine its fate.”

Crackdown on Palestinian media

Sultan recalled a particularly tense moment in the PLO’s relationship with the Syrian regime.

“The organization operated a radio station in Syria. One day, it aired a segment quoting Arafat, including the phrase ‘There is water in my mouth’—a cryptic remark hinting at unspoken grievances. Syrian authorities responded swiftly, sending bulldozers to demolish the station and arresting several staff members.”

That night, Palestinian officials approached Sultan, urging him to speak with Kamal Jumblatt.

“Jumblatt suggested we arrange a meeting with Assad. It was Ramadan, so I contacted Hikmat al-Shihabi, then head of Syrian intelligence and our liaison,” recalled Sultan.

As the meeting neared sunset, Jumblatt sat across from Assad, with Sultan seated beside the Syrian president. The discussion quickly turned hostile toward Arafat.

“The conversation was filled with insults. Phrases like ‘We’ll bring him in’—implying they’d arrest him—and ‘We’ll flip him over’—a reference to how prisoners were beaten—were thrown around. Jumblatt, always polite and measured, stopped eating. Sensing his discomfort, Assad turned to me and asked me to intervene.”

Sultan responded: “Mr. President, the Palestinian fighters are not our schoolmates. We are committed to the Palestinian cause, and today, the PLO and Arafat represent that cause. These men have endured extreme hardships.”

Assad listened and then conceded: “Abu Rashid is right. Consider it settled, Kamal Bey.” The detainees were subsequently released.

A meeting between Kamal Jumblatt and Arafat attended by Toufic Sultan, George Hawi, Mohsen Ibrahim, and Yasser Abed Rabbo. (Courtesy of Toufic Sultan)

Deep-seated mutual hatred

Asked whether the animosity between Assad and Arafat was evident at the time, Sultan did not hesitate.

“Of course. It was well known,” he said. “One way to ingratiate oneself with Assad was to openly attack Arafat.”

He recalled a meeting with Walid Jumblatt, Assem Kanso—the head of Lebanon’s Baath Party—and Syrian Vice President Abdul Halim Khaddam.

“When Arafat’s name came up, Khaddam abruptly declared, ‘Yasser Arafat is an Israeli spy.’ I remained silent. He turned to me and asked for my opinion. I simply said, ‘I heard you.’”

Khaddam pressed further: “What do you think?”

Sultan replied: “I respect your opinion, and this is your office. But if you want my honest view, it won’t please you.”

The atmosphere surrounding Assad was particularly hostile toward Fatah. Syrian authorities used every means at their disposal to infiltrate the group.

After years of effort, they succeeded in orchestrating major defections, the most notable led by Abu Saleh, Abu Musa, and Abu Khaled al-Omleh. Damascus provided these factions with logistical support, training camps, and other resources.

“Syria had the power to shrink or amplify political movements,” remembered Sultan.

Despite knowing that geography gave Assad a strategic advantage, Arafat was not an easy adversary.

He countered Syria’s animosity with his trademark defiance—flashing the victory sign and invoking phrases like “the Palestinian bloodbath” and “the longest Arab-Israeli war.”

These references underscored the resilience of Palestinian fighters and their Lebanese allies during Israel’s 1982 siege of Beirut, led by then-Israeli Defense Minister Ariel Sharon.

At the time, many believed that Arafat’s relentless emphasis on “independent Palestinian decision-making” was aimed more at Assad than at any other party.

Damascus, in turn, saw Arafat as dismissive of the sacrifices made by the Syrian army during Israel’s invasion of Beirut.

Syrian officials also suspected that he was waiting for an opportunity to join peace negotiations with Israel—an option that had eluded him after he failed to follow in the footsteps of Egyptian President Anwar Sadat in the late 1970s.