Saudi Arabia to begin instant bank transfers to support its eCommerce sector

By Shilpa Annie Joseph, Trainee Reporter
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Saudi Arabia is reportedly planning to launch a new inter-bank money transfer system, which enables payments to be processed faster between local banks, helping to promote growth in the Kingdom’s rapidly developing eCommerce sector.

This system, which is expected to be introduced this month, will allow money to be transferred between local banks 24 hours a day at a more favorable rate.

According to Talat Zaki Hafiz, an economist and member of the board of the Saudi Financial Association, Euro Retail Payments Board has described instant electronic payments as electronic retail payment solutions available 24 hours a day, seven days a week, and 365 days a year, with payments processed between accounts within seconds.

Hafiz pointed out that local payment processing has traditionally been limited to bank business hours and will not take place beyond these hours or on weekends and holidays and this new framework will help to overcome these limitations.

The new initiative follows the reports that digital payment transactions in the Kingdom soared by 75 percent in 2020 as Saudi customers embraced online shopping during the COVID-19 pandemic.

Mr. Hafiz said in a statement that the new scheme coming this month will help boost the growth of digital payments and the increase in eCommerce.

“Such payment solutions will not only speed up the movement of money between clients’ bank accounts but also help eCommerce to grow, since it ensures making speedy payments of goods and services to the merchants, which, in turn, makes shopping much easier and enjoyable,” he added.

“The events of 2020 made it an extraordinary year for eCommerce. Our research shows that this year consumers will swap door-buster deals for online discounts that start sooner and last longer,” commented Alistair Burton, country manager, Middle East, and Africa, at Criteo.

Read More: UAE businesses can now do virtual card payments with HSBC

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