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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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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.