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Saudi Arabia world’s fastest growing market for contactless payments: Visa

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Updated 31 October 2022
Fahad Abuljadayel and Nour El-Shaeri

Saudi Arabia world’s fastest growing market for contactless payments: Visa

Saudi Arabia world’s fastest growing market for contactless payments: Visa
Updated 31 October 2022
Fahad Abuljadayel and Nour El-Shaeri

RIYADH: Global digital payment firm Visa has said that Saudi Arabia’s contactless payment adoption has seen the fastest growth in the world.

Speaking on the sidelines of the 6th edition of Future Investment Initiative forum in Riyadh, Visa's regional president Andrew Torre, told Arab News that the Kingdom saw the highest digital payment growth curves in the world.

“In 2017, only 4 percent of all face-to-face transactions were contactless. If you fast forward to the end of 2021, it was the highest adoption curve in the world. We've seen it go from 4 percent to 97 percent,” Torre told Arab News.

He added that contactless transactions were not just made with physical cards, but also through mobile phones, as he noted the huge shift in the Kingdom’s financial technology sector.

“This is certainly a very fast growth market. It's probably one of the fastest growing markets in the world and in the Middle East,” Torre said.

Contactless payments are transactions made by tapping either a contactless chip card or payment-enabled mobile or wearable device over a contactless-enabled payment terminal.

Torre further added that 60 percent of all payments made in the Kingdom were digital.

The company has been pushing out many initiatives to support Saudi Arabia’s financial technology sector. During the forum it announced the launch of its Global Innovation Center in the Kingdom.

The innovation hub is set to open by the end of 2023 in Riyadh, as the company aims to provide its partners with cutting-edge financial technology to bolster the creation of domestic solutions.

Torre stated that the innovation center aims to make $40 billion in remittances sent abroad from Saudi Arabia faster, cheaper and near real-time.

“We will bring fintechs here and partners and clients here to be able to not only innovate in the Kingdom but also innovate outside of the Kingdom as well and grow their businesses across the MENA region,” he added.

The company has also been supporting female entrepreneurs with the launch of its 'She’s Next’ initiative earlier this year.

Torre explained that the initiative provided around 20 female entrepreneurs with financing, expertise and knowledge on growing their businesses in multiple fields besides fintech.

The company works with many private and public institutions, as it aims to focus more on the rise of entrepreneurship and startups in the Kingdom.

 

 

Topics: contactless payment saudi market FII6 business

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  
Updated 31 May 2023
Arab News

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  

UAE’s Mirfa 2 RO plant achieves financial closure, raises $620m  
Updated 31 May 2023
Arab News

RIYADH: Abu-Dhabi-based Mirfa 2 water desalination project has secured funding of 2.3 billion dirhams ($620 million), achieving financial closure of what will become the UAE’s third-largest reverse osmosis plant. 

Abu Dhabi National Energy Co., or TAQA, announced the financial closure alongside French low-carbon services company ENGIE and Emirates Water and Electricity Co. in a bourse filing. 

According to the filing, 78 percent of the project is primarily funded through debt financing from local and international banks, including Abu Dhabi Islamic Bank, BNP Paribas Fortis, Sumitomo Mitsui Banking Corp., The Norinchukin Bank, BNP Paribas and KfW IPEX-Bank. 

The Mirfa 2 RO plant will produce roughly 550,000 cubic meters of potable water daily and will be operational by the fourth quarter of 2025. 

While TAQA would own 60 percent of the project and ENGIE the rest, both companies will take on the operations and maintenance of the plant. 

The release further stated that EWEC would procure the water supplied from the plant for 30 years.  

“TAQA is proud to invest in the development, ownership, and operation of this critical water project in Abu Dhabi, which will contribute to the UAE’s decarbonization efforts as well as TAQA’s emissions reduction targets,” said Farid Al-Awlaqi, executive director of generation, TAQA in the statement.  

He added: “Mirfa 2 RO also enables us to accelerate how we decouple power and water operations across our assets to further reduce our carbon impact.” 

The Mirfa 2 RO plant is EWEC’s fifth low-carbon intensive RO desalination project in a pipeline of initiatives to decouple water and power generation toward realizing the Abu Dhabi Department of Energy’s Clean Energy Strategic Targets 2035 to reduce carbon emissions by 75 percent. 

“Through our initiatives, we forecast that over 90 percent of our water production will be from RO technology by 2030, resulting in an 88 percent reduction in carbon emissions associated with water production,” said Othman Al-Ali, CEO of EWEC.  

The plant will leverage efficient RO desalination, up to six times more efficient than traditional thermal desalination. The technology would also enable plant operators to reduce carbon emissions by decoupling water and power generation processes, thus supporting the broader efforts of the energy sector to cut costs and achieve sustainability targets.  

“We are delighted to have achieved financial close and look forward to commencing build and ultimately operations,” said Frederic Claux, managing director of the flexible generation and retail division of ENGIE in Asia, the Middle East and Africa. 

Topics: TAQA desalination financial closure EWEC Engie

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Closing bell: Oil prices weigh down Saudi stocks

Closing bell: Oil prices weigh down Saudi stocks
Updated 31 May 2023
Arab News

Closing bell: Oil prices weigh down Saudi stocks

Closing bell: Oil prices weigh down Saudi stocks
Updated 31 May 2023
Arab News

RIYADH: Saudi Arabia’s Tadawul All Share Index dropped by 125.85 points or 1.13 percent to close at 11,014.13, driven by a fall in oil prices that affected investors’ morale. 

While parallel market Nomu lost 335.24 points to 21,278.26, the MSCI Tadawul Index fell 1.31 percent to 1,464.41. 

The total trading turnover of the benchmark index was SR11.79 billion ($3.14 billion) as 58 stocks advanced, while 155 retreated. 

Brent crude futures for August delivery were down $1.69, or 2.30 percent, to $71.85 a barrel at 3:15 p.m. Saudi time, while US West Texas Intermediate crude fell $1.99, or 2.87 percent, to $67.47. 

The top stock of the day was Jarir Marketing Co., as its share price advanced 6.02 percent to SR17.60. 

Jarir Marketing Co., on Wednesday, said that its shareholders had approved the board’s proposal for reducing the stock’s par value from SR10 to SR1 during the extraordinary general meeting conducted on May 30. 

Jadwa REIT Saudi Fund and Saudi Fisheries Co. were other top gainers of the day, whose share prices rose by 3.76 percent and 3.06 percent, respectively. 

Saudi Pharmaceutical Industries and Medical Appliances Corp. was the worst performer as its share price dropped 4.76 percent to close at SR38.05. 

Meanwhile, the board of directors of Al-Baha Investment and Development Co. recommended splitting the stocks par value from SR10 to SR0.1 while keeping the company’s capital intact. 

In a bourse filing, the company said that the number of its shares following the split would be 2.97 billion. 

On Wednesday, Filing and Packing Materials Manufacturing Co. announced that its board of directors approved to transform the legal entity of its subsidiary FPC Industrial Co. from a limited liability company to a joint stock company. 

“This transformation will support FPC’s objectives aiming for future expansions. Also, it will maintain its stability and sustainability and will support the company’s financial position, which supports increasing export sales and improves the credit relationship with some large foreign clients to increase the company’s export share and in line with the needs of global markets,” said FIPCO in a statement to Tadawul. 

The statement added that FIPCO’s board of directors also decided to set an authorized capital of SR100 million and raise the paid-up capital from SR18 million to SR70 million. 

According to the statement, the capital hike will be financed using some current account balances between partners. The company’s share price dropped by 1.57 percent to SR43.90. 

Topics: Closing Bell Tadawul All Share Index (TASI) MSCI Tadawul 30 Index nomu-parallel

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m
Updated 31 May 2023
Reina Takla
Reem Walid

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m

Number of SMEs in Saudi Arabia rises 4.8% in Q1, exceeds 1.2m
Updated 31 May 2023
Reina Takla Reem Walid

RIYADH: Saudi Arabia is witnessing increased entrepreneurial activity as the total number of small and medium enterprises exceeded 1.2 million in the first quarter of 2023.

According to a report released by the Small and Medium Enterprises General Authority, also known as Monsha’at, this figure reflects a 4.8 percent surge compared to the final quarter of 2022.

The report further revealed that 88,858 new businesses were launched across the Kingdom in the first quarter of 2023.

“Saudi Arabia’s robust SME ecosystem passes new milestones every quarter,” Mohammed Al-Belwe, Monsha’at vice governor for communications, told Arab News.

“More than 88,000 new SMEs were launched in Q1 alone, bringing consumers a new array of goods and services and spurring growth across key sectors such as tourism, e-commerce, retail, food and beverage, and fintech,” Al-Belwe said.

“Behind these numbers is an exciting new generation of entrepreneurs who are striking out on their own, and as the Kingdom’s non-oil economy surges, the growth of SMEs will continue to kindle unprecedented private sector growth,” he added.

Riyadh was home to 41.4 percent, followed by Makkah at 18.1 percent, the Eastern Province at 11.1 percent and the other cities accounted for 28.6 percent of the total SMEs in the Kingdom.

SME financing reached its highest level in the first quarter of 2023, touching SR1.35 billion ($359 million).

The e-commerce and retail sectors emerged as the most active sectors in terms of financing during the first quarter of 2023, the report revealed.

It also highlighted the initiatives of the Small and Medium Enterprises Bank, which provided six financing products, including credit cards for enterprises and e-commerce financing.

The products also include financing working capital, microfinance, financing with a revolving credit line, and term financing.

Also noteworthy were the achievements of the Biban 2023 Forum, an event held in Riyadh in March and attended by an estimated 145,000 visitors from all over the world.

The event generated over $13.8 billion in agreements and announcements for SMEs in the Kingdom.

Under the Vision 2030 goals, the SME sector aims to contribute 35 percent of the gross domestic product by 2030.

Moreover, SMEs are set to play a significant role in achieving the Kingdom’s objectives of lowering the unemployment rate from 11.6 percent to 7 percent and increasing women’s participation in the workforce from 22 percent to 30 percent.

Topics: SMEs SaudiVision2030 Growth

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Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh
Updated 31 May 2023
Reina Takla
Nirmal Narayanan

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh

Amazon doubles storage capacity in Saudi Arabia with new facility in Riyadh
  • E-commerce giant eyes 40,000 online sellers in Saudi Arabia by 2025
Updated 31 May 2023
Reina Takla Nirmal Narayanan

RIYADH: Amazon has launched a new fulfillment center in Riyadh doubling its total storage capacity in Saudi Arabia and increasing selling opportunities for small and medium-sized businesses.

The facility, which spans 390,000 sq. feet across five floors, with 2.7 million cubic feet capacity can store more than 9 million products, according to a statement .

The opening of the fulfillment center in the Saudi capital will provide SMBs a platform to showcase their products and expand their reach, a top official of the e-commerce giant said.

In an interview with Arab News, Prashant Saran, director of operations for Amazon in the Middle East and North Africa region, said that the new facility will provide sellers with more storage options and help them expand their online businesses to new markets.

“Whenever a new fulfillment center opens, it has a transformative impact on the economy of the host city by contributing to expanding product selection and availability, growth of e-commerce sales, talent development, and the acceleration of entrepreneurship,” said Saran.

He added: “The majority of products sold on Amazon.sa come from small and medium-sized businesses. In fact, many SMBs venture into e-commerce for the first time using our simple and convenient services.”

Saran noted that Amazon has been working closely with Saudi Arabia’s General Authority for Small and Medium-Sized Enterprises, also known as Monsha’at, to host 40,000 sellers on Amazon.sa by 2025.

Amazon’s fulfillment centers are hubs that enable the e-commerce firm to store millions of units of inventory, and serve as distribution centers where associates store, pick, pack, and ship orders.

The new center was opened in Riyadh on Tuesday in the presence of Suliman Al-Mazroua, CEO of the National Industrial Development and Logistics Program, and officials of the Ministry of Transport and Logistics Services, the Transport General Authority; and Monsha’at.

“Amazon’s expansion supports Saudi Arabia’s logistics sector — one of NIDLP’s four key sectors — bringing the latest innovations and technologies in e-commerce operations to the country. The new fulfillment center in Riyadh will further unlock the value of the Kingdom’s resources by empowering local startups and entrepreneurs with improved global connectivity and access to new markets,” said Al-Mazroua, according to the statement.

“Led by a diverse cohort of talented Saudi nationals in managerial positions, we expect this fulfillment center to support the Kingdom’s digital economy goals,” said Abdo Chlala, country manager of Amazon in Saudi Arabia.

According to the press release, the facility is powered 100 percent by electricity, including its heating and hot water systems, avoiding the use of fossil fuel combustibles and with energy efficiency as a top priority, in line with the company’s goal to turn net-zero by 2040.

Saran added that Amazon has been always cooperating with the Kingdom to support its localization efforts, and with Amazon Academy announced earlier this year, the e-commerce giant is providing training to 30,000 Saudi citizens in cloud technology, retail, and logistics.

“We have been making steady progress and today, Saudi women at the new fulfillment center occupy a variety of leadership positions within operations, human resources, learning and development, IT, among other departments,” he said.

Topics: Amazon Saudi Arabia General Authority for Small and Medium Enterprises small and medium enterprises

Saudi banking sector growth driven by mortgages: report

Saudi banking sector growth driven by mortgages: report
Updated 31 May 2023
Arab News

Saudi banking sector growth driven by mortgages: report

Saudi banking sector growth driven by mortgages: report
Updated 31 May 2023
Arab News

RIYADH: Saudi Arabia’s banking sector has experienced rapid growth over the past few years, primarily driven by mortgages and thanks to continued government support, according to a new report from S&P Global Ratings.

The US-based agency pointed out that the Saudi government “has created the infrastructure for banks to divest their mortgage portfolios and improve the structure of their balance sheets” to boost home ownership to 70 percent, a key Vision 2030 objective.

Private sector deposit growth averaged about 5 percent over the past five years, compared with 14 percent growth in deposits from the government and its related entities. 

The rating agency noted that the government still held significant deposits with the Saudi Central Bank, also known as SAMA, amounting to SR637.5 billion ($170 billion) at the end of 2022.

“This means that it can theoretically ease liquidity constraints by placing more deposits with the banking system. In 2022, SAMA reacted to liquidity stress by intervening and injecting SR50 billion, and we expect it to continue providing banking system liquidity when required,” it added.

Dr. Mohamed Damak, senior director and head of Islamic Finance at S&P Global Ratings, said: “We expect the Saudi banking system will continue to play a key role in financing Vision 2030 projects, with high single-digit percentage loan growth in the next couple of years.”

He added: “Banks can achieve this by mobilizing additional resources in the form of deposits or local and international issuances.”

Topics: S&P Global Ratings saudi central bank Saudi banking

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