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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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Amr Moussa to Asharq Al-Awsat: Gaddafi Initially Treated Me as an American Spy, Then Things Changed

Hosni Mubarak was able to manage the difficult relationship with Moammar al-Gaddafi. (AFP)
Hosni Mubarak was able to manage the difficult relationship with Moammar al-Gaddafi. (AFP)
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Amr Moussa to Asharq Al-Awsat: Gaddafi Initially Treated Me as an American Spy, Then Things Changed

Hosni Mubarak was able to manage the difficult relationship with Moammar al-Gaddafi. (AFP)
Hosni Mubarak was able to manage the difficult relationship with Moammar al-Gaddafi. (AFP)

In the third installment of his interview with Asharq Al-Awsat, former Egyptian Foreign Minister and ex-Secretary-General of the Arab League Amr Moussa discusses various experiences with Arab leaders, emphasizing the nuances of diplomacy in a turbulent region.

Moussa recalled that former Egyptian President Hosni Mubarak “was neither bloodthirsty nor a pharaoh, nor did he try to be one.” He points to a famous remark by President Anwar Sadat, who once said: “Gamal (Abdel Nasser) and I are the last of the pharaohs.”

The Gaddafi encounter

Reflecting on his complex interactions with Libyan leader Moammar al-Gaddafi, Moussa admitted that the beginning was anything but smooth. “When I first met Gaddafi, he treated me as if I were an American spy. He wouldn’t look at me directly, only speaking while facing another direction. It was very theatrical,” Moussa said. He recalled this behavior with a certain amusement, treating it almost like a game: “I would wager with myself before our meetings—will he speak to me directly this time, or not?”

Initially, rumors had reached Gaddafi that Moussa had been sent with a US agenda, though he had actually been Egypt’s ambassador to the UN in New York, not Washington. “But once he observed how I performed in my role, he began to change his mind. Eventually, he would ask President Mubarak if I could join their private discussions.”

Moussa recalled a specific instance in Tobruk, where he was invited by Gaddafi to sit at a table with him and Mubarak to discuss a matter of importance. He knew this would stir unease among others present, but the conversation went ahead regardless. This type of scene, he noted, happened several times.

Hosni Mubarak, Moammar al-Gaddafi and Amr Moussa at the Arab summit in Sirte in 2010. (AFP)

Diplomatic drama in a tent

When Gaddafi visited Cairo during Moussa’s tenure as foreign minister, the Libyan leader insisted on setting up his trademark tent in the gardens of the Qubba Palace. Though the palace was fully equipped, Gaddafi would receive guests only in the tent. “At that time, he still saw me as a US spy,” Moussa said, “so he avoided looking at me during our meeting. He inspected every corner of the tent—except the one where I was sitting.”

Despite Gaddafi’s sometimes abrasive behavior, Moussa conceded that the Libyan leader was intelligent and unique. “He was eccentric, yes, but he had a cleverness about him. His actions often carried a deeper rationale, even if misguided.”

Gaddafi’s erratic rule extended to his own ministers. Moussa noted how even highly regarded officials like Abdul Rahman Shalgham and Ali Treki were subject to his whims. “If Gaddafi was displeased with something, he might simply tell you to stay home—and that could mean house arrest for years. Yet, your salary would still arrive at your door.”

A moment of humor

One incident stood out. Libya was scheduled to host the Arab summit and had failed to pay its dues to the Arab League, and as Secretary-General, Moussa received an envoy from Gaddafi carrying a list of demands. Moussa didn’t even read the letter; he simply locked it in a drawer. “When the envoy asked what to report back, I told him exactly that,” Moussa laughed.

Soon after, Gaddafi summoned him to Sirte. As Moussa waited in the tent, Gaddafi’s secretary, Bashir Saleh, walked by singing an old Arabic poem: “You seem tearless, and patience is your nature.” Moussa quipped: “Tell the leader he’s not tearless—he’s payment-less!” Saleh shared the joke with Gaddafi, who burst into laughter and finally paid Libya’s dues.

Later, during an Arab summit in Libya, Gaddafi displayed a surprising sense of responsibility. Moussa recalled a heated moment when Yemeni President Ali Abdullah Saleh demanded immediate action on forming a pan-Arab army. Gaddafi gently interrupted: “Take it easy, Ali.” That phrase—“Take it easy, Ali”—spoke volumes, according to Moussa. “It revealed Gaddafi’s desire to manage tension even among volatile leaders.”

On Hosni Mubarak and the ‘pharaoh’ myth

Asked if Mubarak ever resembled the authoritarian archetype of a “pharaoh” as Russians view their “czars,” Moussa was firm: “No, not Mubarak. Maybe Sadat had some traits—he liked symbolism. But Mubarak? He wasn’t violent, nor bloodthirsty. Yes, he could be firm, but he didn’t revel in bloodshed.”

Moussa clarified that while Mubarak might have approved harsh punishments as president, it never escalated to a murderous level. “Perhaps there were isolated incidents, especially within the prison system, but it wasn’t part of Mubarak’s character to govern through violence. He wasn’t built that way.”

Saddam Hussein meets with Amr Moussa in Iraq in January 2002. (AFP)

The song that stirred controversy

When the Egyptian folk singer Shaaban Abdel Rahim sang “I hate Israel, and I love Amr Moussa,” it caused a stir. Moussa downplayed the drama. “I don’t think Mubarak himself was offended. He was the president; no foreign minister would rival him in popularity. But some people in the surrounding circles—not necessarily his inner circle—were irked.”

Eventually, another version of the song emerged, replacing Moussa’s name with Mubarak’s. “But it was the original that made waves. Even a diplomat from Latin America once told me, ‘We’re dancing to this song here!’”

A difficult meeting with Saddam Hussein

One of the most tense encounters Moussa ever had was with Iraqi President Saddam Hussein. After being elected Secretary-General of the Arab League in 2001, Moussa set out to visit all Arab leaders. He deliberately left Saddam until the end, knowing the sensitivities involved.

In January 2002, Moussa visited Saddam at a small palace. He carried a message from UN Secretary-General Kofi Annan regarding weapons inspections. “I told Saddam that Annan was open to negotiations, and that continued confrontation with the US would lead nowhere. At some point, no one would stand by him.”

Moussa asked Saddam directly: “Do you possess nuclear weapons?” Saddam answered, “No.” Moussa pressed him again: “Are you absolutely sure?” Saddam repeated, “No.” This made Moussa’s deputy, Ahmed Ben Helli, visibly nervous. “He probably thought we weren’t going to walk out of there.”

Moussa then asked why Iraq objected to the UN inspectors. Saddam responded: “These people don’t just inspect nuclear sites. They ask civilians about food supplies, their opinions on the government. What business is that of theirs?”

Moussa promised to report this to Annan, which he did. Negotiations resumed between Iraq and the UN, but history took its course and the US-led invasion followed.

Asked if he felt fortunate never to have served directly under a figure like Gaddafi, Moussa answered without hesitation: “Absolutely. I saw how respected men like Shalgham and Treki were sidelined. You could be a top official one day and under house arrest the next.”