Digital payments in Saudi Arabia surge by 75% amid pandemic

 Digital payment transactions in the Kingdom jumped by 75 percent in 2020 as Saudi consumers embraced online shopping during the coronavirus (COVID-19) pandemic. (Shutterstock/File Photo)
Digital payment transactions in the Kingdom jumped by 75 percent in 2020 as Saudi consumers embraced online shopping during the coronavirus (COVID-19) pandemic. (Shutterstock/File Photo)
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Updated 08 January 2021

Digital payments in Saudi Arabia surge by 75% amid pandemic

 Digital payment transactions in the Kingdom jumped by 75 percent in 2020 as Saudi consumers embraced online shopping during the coronavirus (COVID-19) pandemic. (Shutterstock/File Photo)
  • Number of cash withdrawals fell by a third in 2020

RIYADH: Digital payment transactions in the Kingdom jumped by 75 percent in 2020 as Saudi consumers embraced online shopping during the coronavirus (COVID-19) pandemic, while cash withdrawals from ATMs and other payment points fell 30 percent over the same period.

Point of sale (PoS) refers to a place where customers can execute payments for goods or services. This can be a credit card in a clothes store, a digital payment in a coffee shop or through a food delivery app.

Speaking to Arab News, Talat Zaki Hafiz, economist and secretary-general of the media and banking awareness committee for Saudi banks, said: “The total number of the PoS operations in 2020 amounted to about 2.8 billion, an increase of 75 percent compared with the same period in the previous year.”

The value of operations amounted to about SR349 billion ($93.7 billion), an increase of nearly 24.1 percent compared with the same period in 2019, he said.

Consequently, the number of PoS devices operating in the Kingdom rose sharply by the end of 2020 to more than 700,000, an increase of about 70 percent since the beginning of the year.

As consumers turned to online and digital non-contact payments during the pandemic, the number of cash withdrawals carried out in 2020 across the Kingdom dropped by more than 318 million, or about 30 percent year-on-year.

“These statistics and indices confirm the increasing and steady demand by people and businesses to use e-payment technologies through PoS devices,” Hafiz said.

“The measures taken by the government in various sectors, including health and banking, to encourage e-payments have had positive effects and helped to reduce the negative impact of the coronavirus on the country and its people, including businesses.”

He said that the trend of increased online shopping and e-payment will continue even after the coronavirus crisis ends.

More than 60 percent of Saudis are under 30, “which means that society is more geared toward electronic dealings and electronic banking,” he added.

Hafiz said that a main objective of the Financial Sector Development Program (FSDP) — one of 13 executive programs launched by the Council of Economic and Development Affairs to achieve the objectives of Saudi Vision 2030 — is to reduce the amount of cash being used in the Kingdom by developing the national finance infrastructure to allow a transition to e-payments.

Moving toward a cashless society will deliver multiple benefits for the Saudi economy, including cost reductions associated with printing traditional money, as well as providing greater transparency in government monitoring of cash flows for taxation purposes and combating commercial concealment, he said.

Non-cash transactions are expected to make up to 70 percent of all transactions by 2030, Hafiz said.

Evidence of the growing preference for e-commerce over cash was seen during the Black Friday sales late last year. A survey carried out by advertising platform Criteo of 900 Saudi online consumers found that around 40 percent of respondents said they planned to buy more products online, with household products, groceries, and beauty and hygiene items proving most popular.

Alistair Burton, country manager MEA at Criteo, said: “The events of 2020 made it an extraordinary year for e-commerce. Our research shows that this year consumers will swap door-buster deals for online discounts that start sooner and last longer.”

Overall, the research found that 58 percent of Saudi respondents were more comfortable shopping online in 2020 than in-store.

The surge in online interest has not only helped the banking sector. In November, Amazon announced it had created 3,400 new jobs across the Kingdom, with 60 percent of the positions going to Saudi nationals.

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Italy’s Lamborghini eyes big opportunities in Saudi market

Italy’s Lamborghini eyes big opportunities in Saudi market
Lamborghini CEO Stephan Winkelmann says the region is a very important market for the manufacturer and has maintained its importance despite economic challenges. (Supplied)
Updated 2 min 30 sec ago

Italy’s Lamborghini eyes big opportunities in Saudi market

Italy’s Lamborghini eyes big opportunities in Saudi market
  • Super-car manufacturer said its Urus SUV has been a ‘game-changer’ for growth in the Kingdom

DUBAI: Lamborghini, the Italian super car manufacturer, sees Saudi Arabia as potentially its strongest market in the Middle East, its CEO Stephan Winkelmann told Arab News.

“The UAE is currently the biggest one, but we think that Saudi Arabia could become the biggest — it’s currently No. 2. We have the right partner today, so there is a big opportunity. We see growth and more potential,” he said.
Lamborghini has partnered with Saudi elite car dealership Samaco and now has outlets in Jeddah, Riyadh and Alkhobar. Winkelmann said that he saw the Urus, the Lamborghini SUV that has been a big success in the region and accounts for half of new sales, as a “game-changer” in Saudi Arabia.
He said that the region was a very important market for the manufacturer and had maintained its importance despite economic and geopolitical challenges.
He was in the Middle East to discuss with dealers and customers the recent $1.8 billion move by the Italian company to turn away from petrol engine cars later this decade, first with hybrid engines, then with an all-electric car.
Winkelmann said the company is also exploring the possibility of a new generation of synthetic fuels in its super-fast models.

HIGHLIGHT

Lamborghini has partnered with Saudi elite car dealership Samaco and now has outlets in Jeddah, Riyadh and Alkhobar.

Although Lamborghini is not the first super car manufacturer to consider going electric, its move away from the internal combustion engine is still a big challenge.
“For us, it’s even tougher because we not only have to reduce emissions but also maintain performance and make it even better than it was before,” Winkelmann said.
Hybrid plug-in versions of the Aventador and Huracan sports cars will be developed in the next couple of years, alongside the Urus. The first all-electric car — a brand new design — will be introduced in the second half of the decade.
Another challenge for Lamborghini will be how to replicate the famous exhaust “crackle” enthusiasts like in the petrol engine cars.
“We have time to think about this. I don’t think we should try to repeat the sound of the engine and exhaust in an electric car. Maybe we will find a new sound or have no sound at all,” Winkelmann said.
Despite the pandemic recession, Lamborghini had one of its most profitable years ever in 2020, as enthusiasts rewarded themselves for the deprivations of lockdown by splashing out on a new super car. The price of a new Urus, for example, starts at around SR1 million ($270,000), but can be much higher with customization and extras.
“People had time to think about their lives in lockdown and what was coming next,” Winkelmann said.


OPEC+ said to discuss further easing of oil cuts from August

OPEC+ said to discuss further easing of oil cuts from August
Crude oil prices retreated on Tuesday, after Brent rose above $75 a barrel for the first time since April 2019 and as OPEC+ begins discussions on raising oil production. (AFP)
Updated 23 June 2021

OPEC+ said to discuss further easing of oil cuts from August

OPEC+ said to discuss further easing of oil cuts from August
  • Group is aiming to gradually unwind last year’s record oil output curbs

DUBAI: OPEC+ is discussing a further easing of oil output cuts from August as oil prices rise on demand recovery, but no decision had been taken yet on the exact volume to bring back to the market, two OPEC+ sources said on Tuesday.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs. OPEC+ meets next on July 1.
“It is highly possible to increase gradually from August,” said one of the sources, adding that no final decision had been made and the exact volumes are yet to be agreed on.

HIGHLIGHTS

• OPEC+, is returning 2.1 million bpd to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs.

• The talks mean that OPEC and Russia are likely to find common ground again on oil production policy.

• Moscow has been insisting on raising output further to avoid prices spiking.

The talks mean that OPEC and Russia are likely to find common ground again on oil production policy. Moscow has been insisting on raising output further to avoid prices spiking, while key OPEC producers have given no signals on the next step until now.
Russian producers see August as a good time to further ease oil output cuts despite the expected return of Iranian barrels as the market is in deficit, an industry source told Reuters on Tuesday.
“Limping” US production also supports the case for easing the curbs, the Russian source said.
Crude oil prices retreated on Tuesday, after Brent rose above $75 a barrel for the first time since April 2019 and as OPEC+ begins discussions on raising oil production, but a strong demand outlook underpinned prices.


Saudi finance minister issues license for STC bank and Saudi digital bank, both under establishment: cabinet statement

Saudi finance minister issues license for STC bank and Saudi digital bank, both under establishment: cabinet statement
Updated 23 June 2021

Saudi finance minister issues license for STC bank and Saudi digital bank, both under establishment: cabinet statement

Saudi finance minister issues license for STC bank and Saudi digital bank, both under establishment: cabinet statement

RIYADH: Saudi Arabia’s finance minister has issued the necessary license for STC bank and Saudi digital bank, both under establishment, the Saudi cabinet said in a statement on Tuesday.

Developing...


Saudi Central Bank extends SME deferred payment program another 3 months

Saudi Central Bank extends SME deferred payment program another 3 months
Updated 22 June 2021

Saudi Central Bank extends SME deferred payment program another 3 months

Saudi Central Bank extends SME deferred payment program another 3 months
  • Program aims to support small and medium-sized enterprises still struggling due to the pandemic
  • More than 106,000 contracts have benefited since it was launched in March 2020 with a value of approximately SR167 billion

RIYADH: The Saudi Central Bank (SAMA) announced on Tuesday that it is extending a deferred payment program for a second time to help support small and medium-sized enterprises (SMEs) that are still struggling during the coronavirus (COVID-19) pandemic.
SAMA said the program — one of the bank’s initiatives to support private sector financing — will be extended for another three months from July 1 through Sept. 30.
The move is part of SAMA’s role in maintaining the stability of the financial sector, enabling it to promote economic growth and maintain employment levels in the private sector, especially within micro enterprises and other SMEs.
More than 106,000 contracts have benefited from the program since it was launched in March 2020 while the value of the deferred payments for those contracts has amounted to approximately SR167 billion ($44.5 billion).
SAMA has also offered a secured financing program for SMEs as more than 5,282 contracts have benefited from that program with a total financing value of more than SR10 billion, the bank said in a statement.
These programs are meant to support the private sector and the levels of liquidity in the financial sector. They enable financing agencies to provide support while mitigating the economic and financial effects on the SME sector, the bank said.
This is the second time SAMA has extended the two programs to support SMEs. It renewed the deferred payment program for three months last March, while it also extended the guaranteed financing program for an additional year until March 14, 2022.


Beirut is the world’s third most expensive city for expats

Beirut is the world’s third most expensive city for expats
Updated 22 June 2021

Beirut is the world’s third most expensive city for expats

Beirut is the world’s third most expensive city for expats
  • Living in the Lebanese capital as an expat has now become more expensive than living in Tokyo, Zurich, or Shanghai

DUBAI: Beirut has become the most expensive city for expats in the Middle East and North Africa region, and the third globally, based on the latest “Cost of Living” survey by consultancy Mercer.
Jumping 42 places in global rankings, Beirut has been at the center of Lebanon’s economic and political collapse, aggravated by the COVID-19 pandemic and the port explosion last year.
Living in the Lebanese capital as an expat has now become more expensive than living in Tokyo, Zurich, or Shanghai. Turkmenistan’s Ashgabat ranked first, in the list of most expensive cities for expatriates, followed by Hong Kong.
Mercer comes up with the annual list by comparing the cost of more than 200 items in each city, including housing, transportation, food, clothing, household goods and entertainment.
Riyadh has become the most expensive city in the Gulf at 29th globally. Jeddah ranked 94th, the report showed.
Dubai dropped to 42nd in the list, down from 23rd last year, and Abu Dhabi ranked 56th from 39th a year earlier.
Other cities in the Gulf also became more affordable this year, the report revealed, with Bahrain dropping to 71st from 52nd, while Muscat fell to 108th from 96th. Kuwait City dropped two places to 115th and Qatar at 21 places to 130th.