Dubai: Network International expects significant growth to come from Saudi Arabia.
“We entered Saudi Arabia in 2017 and we expect the Kingdom will become a significant growth opportunity in the medium term, given the high level of under-penetration of digital payments and attractive macroeconomic drivers,” said Simon Haslam, Group CEO.
While Saudi Arabia is by far the largest GCC economy, the Kingdom’s close economic cooperation with the UAE is expected to work in favour of Network’s business growth. “The recent bilateral trade and payment agreements have opened up significant market opportunity to support Saudi consumers with greater flexibility in the way they make payments,” said Haslam.
Saudi Arabia is one of the largest payment markets in the Middle East and Africa. But digital payments adoption is only around 15 per cent of transactions. The government has initiatives in place to drive this up to 70 per cent by 2030.
“When you couple that with the largest GDP in the region and a large population under 25 years, you can see excellent potential in the Saudi market,” said Haslam.
In countries with low digital payments penetration, eCommerce acts a key driver of payments innovation. Network sees an increasing number of merchants and financial institutions in the Kingdom seeking to upgrade their digital payments capabilities and offer new or improved services.
The majority of debit, prepaid and acquirer processing is processed “on soil” by banks to meet regulatory requirements — in fact only credit cards can be processed out of the country. These banks are using legacy infrastructure and many of them are keen to outsource to avoid major investment in upgrading their systems to meet demand.
Network is in the process of building infrastructure it needs to expand in the Kingdom. “Given the opportunity in the market, Saudi Arabia is a key growth accelerator for our business. We have started on the credit card side and have two issuer clients in addition to a merchant client. And will look to invest in our capabilities in-country as Saudi Arabia continues to present immense potential.”
The company was included in SAMA’s fintech regulatory “sandbox”, which allows them to test the solutions they intend to launch in the country and support the central bank’s overall efforts to facilitate digital transactions.