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E-Transactions Top 57% of Total Payments in Saudi Arabia in 2021

Consumers in Saudi Arabia now rely more on e-payment methods. (SPA)
Consumers in Saudi Arabia now rely more on e-payment methods. (SPA)
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E-Transactions Top 57% of Total Payments in Saudi Arabia in 2021

Consumers in Saudi Arabia now rely more on e-payment methods. (SPA)
Consumers in Saudi Arabia now rely more on e-payment methods. (SPA)

Electronic payments in the Saudi retail sector exceeded 57% of total transactions conducted in 2021, surpassing the 55% target set out by the Financial Sector Development Program (FSDP), the Saudi Central Bank (SAMA) said in a statement.

SAMA Governor Fahad al-Mubarak said the central bank is working on promoting e-infrastructure, expanding e-payment activities and accelerating the e-transformation of transactions.

He explained that this recent achievement was driven by FSDP and the implementation of the bank’s strategic plans for the payments sector, mainly aiming to reduce dependency on cash and increase the rate of e-payments to 70% by 2025.

He further underlined the joint efforts between the government and the private sector to implement many payment digitization initiatives together with private sector innovation and expansion initiatives and open financial services to a new class of Fintech stakeholders in the Kingdom.

SAMA noted the rise in the number and value of payments made through the national “Mada” payment system during these past few years.

The number of transactions made through this system topped 5.1 billion during 2021, with a growth of 81% compared to 76% in 2020, the statement said.

It further observed a remarkable increase in PoS terminal numbers and commercial sector coverage, with more than a million PoS terminals deployed by the end of 2021 compared to 721,000 in 2020.

The bank also revealed a surge in the rate of contactless digital payments (NFC) methods, accounting for 95% of all PoS transactions in 2021, alongside other e-payment methods such as e-commerce payments, “SADAD” system payments and the new Instant Money Transfer through “Sarie” system and others.

Corporate payments in the business sector saw a significant increase in e-payments, with 84% of the sector’s total payment transactions being electronic in 2021 compared to just 51% in 2019, marking a 65% increase in the past two years.

Results also showed that major corporations rely on e-payments to complete 99.6% of their transactions, while the same metric stood at 78% for SMEs and 76% for micro enterprises, SAMA noted.

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Business

Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.