??? BNPL, digital wallets, and beyond: A deep dive into Saudi's fintech sector

Since 2018, Saudi Arabia has witnessed a remarkable transformation in its fintech sector. By 2022, it has become a dominant force in the financial world.

Today, I’m looking at the Kingdom’s fintech industry, inspired by SAMA’s latest findings.

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Now let’s dive in.

??? BNPL, digital wallets, and beyond: A deep dive into Saudi's fintech sector

The Background

• In 2018, Saudi Arabia's fintech scene was just getting started.

• Only 6 fintech companies were on the scene, but they showed Saudi's big plans for digital finance.
• 4.3 million Saudis jumped on the digital wallet trend, showing they were open to new ways to pay.
• Mobile payment apps started making some noise, hinting at bigger things to come.
• The fintech workforce was growing, ready to push the industry forward.
• 394 merchants teamed up with POS payment acquirers, blending old and new ways of doing business.

Today’s State of Affairs

• By 2022, fintech in Saudi Arabia saw massive progress.

• The number of fintech companies under SAMA soared to 89, a 1,400% increase.
• The industry generated SAR 2.8 billion in revenues with assets reaching SAR 6.8 billion.
• Digital wallets became a staple for 3.8 million Saudis, with top-ups totaling SAR 69.9 billion.
• 27% of the population uses BNPL, highlighting its growing appeal.
• Crowdfunding, insurance aggregators, and mobile payment apps expanded rapidly, diversifying financial options for Saudis.
• The fintech sector now employs 2,858 professionals, up by a staggering 3,300% since 2018.
• Digital wallets facilitated 27 million international transfers worth SAR 43 billion.
• POS systems gained traction, with 73,000 merchants processing transactions worth SAR 13 billion.

What’s Next?

• Given the current trajectory, Saudi's fintech future looks promising.

• The industry is poised for further growth, building on its strong foundation.
• The rise in BNPL usage indicates a shift towards flexible payment options.
• Digital wallets are becoming key players in Saudi's international financial activities.
• The growth of fintech promises a surge in job opportunities and advancements.
• The synergy of technology and finance, supported by Saudi's innovation initiatives, forecasts a dynamic fintech future in the Kingdom.

To get a more in depth analysis of Saudi Arabia’s fintech scene, read the Annual Fintech Report 2022 by Saudi Central Bank – SAMA here .

??? Fintech & Payments

? Colendi, an Anglo-Turkish fintech venture, received approval from the Banking Regulation and Supervision Agency to launch Turkey's first digital bank.

? Mr. Chia Der Jiun is set to become the Managing Director of the Monetary Authority of Singapore.

? Prosecutors debate Sam Bankman-Fried's access to technology in pre-trial detention, arguing accommodations are fair despite his lawyers seeking more privileges for his October trial.

? Mashreq NEO is collaborating with Kotak Mahindra Bank to offer smooth digital account opening for Non-Resident Indian customers in the UAE.

? Arab Financial Services has launched AFS Pay , the first Bahrain solution that turns Android devices into smart Point of Sale terminals for all contactless payments.

? EFG Holding’s aiBANK is partnering with global payments leader Visa to offer customers an integrated package of digital payment solutions.

??? The World of Web3

? The Museum of the Future in Dubai is partnering with Binance NFT for a project starting with a collection titled "The Most Beautiful NFTs in the Metaverse."

? South Korean gaming company Netmarble Corp. is collaborating with Hana Financial Group to create financial experiences and business ventures within the metaverse .

??? The Future is AI

? UAE's G42 is launching an open-source Arabic language AI model named Jais, developed from a diverse dataset that blends Arabic and English.

? Google has launched generative AI for Search in India and Japan , enabling text and visual results in response to prompts, including summaries.

? China's Baidu has unveiled Ernie Bot , a competitor to ChatGPT, powered by Baidu's Ernie language model trained on extensive text and code data.

??? The State of Investment

? In August 2023, MENA startups secured $76 million in funding from 18 deals, performing strongly compared to the wider Middle East, Africa, and Pakistan region, which raised $139 million across 46 deals during the same time frame.

? Emirates NBD's Innovation Fund is investing in Komgo , a software development and technology services company transforming the trade finance industry.

? Egyptian fintech startup HEDG has obtained a six-figure pre-seed funding ? round from investors in both Egypt and Saudi Arabia.

? Dubai's fintech platform MALY has raised over $1.6 million in a pre-seed funding round.

? UAE's e& capital has joined a $25 million Series A funding round for US-based AI startup Ikigai Labs, alongside Premji Invest and Foundation Capital.

??? Report of the Week

Digital assets: The end of magical thinking?: This Deutsche Bank report examines cryptocurrencies post-boom and bust, pondering their shift from speculation to real-world utility. Insights include the impact of low rates on the bubble, with some recovery. To sustain value, crypto needs practical uses, like equities. The report notes stablecoins' post-Terra crash resilience but ongoing Tether concerns. Click here to read the full report.

??? The Podcast for Fintech Enthusiasts

In this week's episode, I sit down on the couch with Radu Topliceanu, the EVP and Head of Neo and Personal Banking at Mashreq. We're diving into digital banking, getting an insider's perspective on how traditional banking's digital shift. With over two decades of experience in the digital realm, Radu brings a wealth of knowledge to the table. Tune in to explore how banks are navigating this transformation to meet the evolving expectations of customers.

??? This Week’s Payments News

This week we have news from PayPal , Uber , ingiz , Mastercard , Twitter , Shopify , Visa , NALA , Trustly , SlimPay , and more.

If you want to stay up-to-date on all things fintech, subscribe here .

And thank you to our sponsors Adyen, ToYou, Visa, Geidea, and M2P Fintech for making today's edition possible.