The Evolution and Impact of Digital Remittances
This article is brought to you in partnership with Visa.
The landscape of cross-border remittances has undergone a significant transformation over the past few
decades, moving away from being high-friction, expensive, and low transparency to being near real-time,
more cost-efficient, and more transparent.
The advent of digital remittance services has revolutionised this landscape. To enable this evolution, the
payments industry continues to make significant strides in the types of innovative solutions, the various
use cases, and the speed and costs of remittance services. This shift is reshaping how money is sent and
received globally, impacting millions of lives and economies.
The Digital Transformation
Digital remittances are now at the forefront of the industry, driven by advancements in mobile
technology and connectivity. Visa’s “Money Travels: Digital Remittances Adoption” Report found that
digital remittances are the preferred method among consumers across all surveyed countries, with 53%
of consumers turning to digital apps to send and receive funds around the world. According to the World
Bank, digital remittances are nearly 2% cheaper than cash remittances, which is a significant saving for
those sending money cross-border on a regular basis.
The benefits of digital remittances extend beyond just cost savings. These platforms offer speed, security,
and convenience, ensuring that funds are transferred quickly and safely. Of the estimated 200 million
migrants who send funds to their collective 800 million family members back home, many are turning to
digital methods, because app-based digital payments are considered the most secure means for sending
funds abroad1. This is particularly crucial for families who rely on remittances for everyday needs like
food, education, and medical expenses.
Economic and Social Impact
When these payments are digital, they provide an additional boost to economic empowerment and
financial inclusion. With advances in digital payments, families benefit from the lower cost of sending or
receiving money abroad. They can have money available in near real-time so that they can spend it
immediately on what they need. With the right guardrails in place, remittance firms and lenders can
work together to extend credit based on customer behaviour, increasing access to financial services that
immigrants lack when they first move.
While remittances can improve the living conditions of those back home, they also fuel growth rates of
receiving economies. 29 countries received over 10 percent of their gross domestic product (GDP) in
remittances in 20221, while seven received over 25 percent of their GDP this way2.
Future Prospects and Challenges
Despite the advancements, challenges remain. Many payment corridors still lack basic infrastructure like
electricity and internet connectivity, which is a barrier for millions in digitising their cross-border
payments.
Innovation within Fintechs and banks, the transformation of global remitters and capabilities of solutions
developed by global payment networks are focused on helping to bring seamless, secure, and rapid
digital remittances within reach. Expanded choices are also important in how digitally enabled migrant
workers can more easily compare providers and costs to choose the best options for their families. Visa
Direct, Visa’s real-time money movement network, is powering many of these new solutions by helping
facilitate the fast delivery of funds directly to cards, bank accounts, and wallets around the world3.
The evolution of cross-border remittances from traditional methods to digital platforms has had a
transformative impact on global economies and communities. As digital adoption continues to rise, it
holds the potential to further empower individuals and drive economic growth, provided the challenges
of digital infrastructure are addressed. The future of remittances is undeniably digital, promising greater
efficiency, security, and inclusion for millions around the world.
1Money Travels: 2023 Digital Remittances Adoption Report (visa.com)
3 Actual fund availability depends on receiving financial institution and region.
Meet Visa at IPR Global 2024
Joining as Platinum sponsors, you can meet Visa at our annual IPR Global event, where you can dive into deep conversations, explore potential partnerships, and discover the latest trends in the industry from leading influencers.
The top decision-makers will be there, so don’t miss this golden opportunity. Our spaces are limited, so seize your ticket now before it runs out at: https://global2024.ipr-events.com/
We look forward to seeing you!
Remittances: A Powerful Force for Financial Inclusion
This article is brought to you in partnership with Clear Junction, written by Dima Kats, Founder and CEO, of Clear Junction.
Given how much migration around the world has grown over the past two decades, and combined with technology making money transfers more accessible, remittance corridors, inflows and outflows have undergone significant shifts.
No matter where remittances are sent from and headed to, it’s vital that they are made with security and speed built-in. But many remittance providers are struggling to facilitate fast and cost-effective remittances due to high costs, FX conversion challenges, and logistical hurdles. And sadly, that means many people seeking efficient remittance services have struggled to access and afford them. On the other side are recipient individuals and families who depend on those services – they can’t afford to be faced with delays in receiving funds.
Traditionally, the main option for remittances were money transfer networks like Western Union or the post office. But these transfers are often slow to be processed, and in places where physical infrastructure is sparse, chances are that recipients in home countries need to be paid via non-banking payment rails. However, not all payment networks may be available or accessible in every region, limiting the reach of remittance services.
Another challenge is that many banks are hesitant to work with remittance companies due to the perceived higher risk associated with money transfer businesses, which leads to account closures or limited access to banking services.
High transaction costs, including fees associated with currency conversion, international transfers, and intermediary banks, can also eat into remittance profit margins. Finding cost-effective payment solutions that offer competitive exchange rates and low fees is a constant challenge. This means many remittances remain cash-based and therefore more prone to fast-changing FX conversion rates eating into remittance balances and provider profitability.
Fluctuations in exchange rates can impact the profitability of remittance companies, especially those operating in multiple currencies. Remittance companies need access to services with the best FX rates on the most commonly used currencies like USD, EUR or GBP in order to give the best value to their customers.
On top of all of that, employing secure and proven technology is of paramount importance, as is the knowledge that when funds are sent, they will appear in the recipient’s account in as little as a few minutes.
That’s why Clear Junction’s platform is designed to minimise the operational and financial challenges of scaling up remittance FinTechs. We understand the difficulties faced by remittance companies in establishing accounts. So, our collection accounts enable remittance companies to hold a monetary balance with Clear Junction, enabling them to gain access to domestic and international payment networks across the UK, Europe, and US and benefit from competitive FX rates when conversion is needed.
Clear Junction provide a transparent fee structure, which gives remittance companies full visibility of the costs that they will incur on making cross-border payments – unlike some traditional methods when you do not understand the fees until the transaction has been received.
With remittances worth billions of EUR and GBP flowing through our pipes, we’re trusted by a wide range of players to provide reliable technical infrastructure, fast transaction routing, and low FX rates that enable people to send money home, to where it’s needed most – at the fingertips of recipients.
What’s more, Clear Junction can help remittance companies extend their reach outside their domestic markets, enabling them to access and build strong relationships with counterparties in various geographies. Our existing clients operate as a network and often times we are pleased to see internal settlements within that network.
Amongst the advantages offered by Clear Junction is the upcoming roll out of cross-border settlements using stablecoins. Using blockchain and pegged to a reserve asset like US dollars, stablecoins offer real-time settlement and remove the intermediaries that add to fees and risks. Stablecoins hold the potential to fundamentally transform remittance flows to underserved and emerging markets, empowering more financial inclusion and economic development, at societal and global levels.
With Clear Junction, you’re guaranteed clear advantages in your remittance offerings: reduced transaction costs, faster and more secure remittance flows, and the power to reach more customers. Get in touch with us at https://clearjunction.com/contact/ if you’d like to find out how we can help your business.
Meet Clear Junction at IPR Global 2024!
Joining as Platinum sponsors, you can meet Clear Junction at our annual IPR Global event, where you can dive into deep conversations, explore potential partnerships, and discover the latest trends in the industry from leading influencers.
The top decision-makers will be there, so don’t miss this golden opportunity. Our spaces are limited, so seize your ticket now before it runs out at: https://global2024.ipr-events.com/
We look forward to seeing you!
Attijariwafa Bank Group adopts RemitONE’s platform, enhancing its money transfer offering
June 2024: Attijariwafa Bank, a leading banking and financial group, is enhancing its money transfer offering by adopting RemitONE’s Money Transfer System. Their objective was to secure a robust, compliant, and highly secure online money transfer platform that could seamlessly integrate with third-party delivery networks across their expansive pan-African network. This decision aimed to ensure the strict enforcement of compliance procedures while sustaining rapid growth, ultimately delivering a dependable platform for their customers to securely transfer money online and in-person at their offices.
Ranked as the largest bank in Morocco and among the top five in Africa, Attijariwafa Bank Group has made RemitONE its preferred money transfer platform provider. This strategic move reinforces their position as the leading player in the banking and financial sectors within these regions. Known for their dynamism and innovation, Attijariwafa Bank Group has diversified its business operations and expertise to cater to the needs of all individuals, regardless of their social status or background.
Mr Oussama Kseibati, Head of Sales, commented, “RemitONE is proud to be partnering with Attijariwaffa Bank, to assist in their digital transformation. Attijariwaffa have chosen RemitONE as a white label end-to-end system provider, to increase reach to customers while providing a fast, reliable and user-friendly experience. We are excited to be working with this leading bank and look forward to a long-lasting prosperous relationship”.
Learn more at attijariwafabank.com and follow them on LinkedIn and Twitter (@AttijariwafaB).
About RemitONE
RemitONE is the leading provider of money transfer software solutions for banks, telcos, and money transfer operators (MTOs) worldwide. Organisations of all sizes use the RemitONE platforms to run their money transfer operations with ease and efficiency by reaching out to their customers via multiple channels including agent, online and mobile.
For more information on RemitONE, please email sales@remitone.com
Dahabshiil UK Partners with RemitONE to Revolutionise Money Transfers in Africa with Cutting-Edge Digital Solutions
July 2024: Dahabshiil UK, part of the international Dahabshiil brand, is a leading Money Service Business (MSB) specialising in cross-border money transfer services from the UK to Somalia, Somaliland, other parts of Africa and other continents around the world.
Dahabshiil UK and RemitONE have announced a strategic partnership to realise business growth. This collaboration allows Dahabshiil UK to utilise the RemitONE software’s powerful compliance features and mobile app technology to support their transition from their current brick-and-mortar model to a digital one.
Dahabshiil UK will work with supply-chain members – including payment gateways, IDV providers, Open Banking partners, SMS gateways and money transfer operators – that are part of the vast RemitONE Ecosystem™. RemitONE will, in turn, enhance its growing ecosystem by onboarding Dahabshiil UK’s network of send and payout agents.
Lamin Bojang, CEO, Dahabshiil UK: “We are thrilled to partner with RemitONE in this digital transformation journey. This collaboration represents a significant milestone in our mission to provide fast, secure, and affordable money transfer services to our customers globally. Leveraging RemitONE’s advanced technology will enable us to expand our reach and improve the efficiency of our operations, ultimately benefiting our customers by offering them more convenience and better service.”
Aamer Abedi, Chief Marketing Officer at RemitONE: “We are very excited to be working with Dahabshiil UK. We see this partnership as part of our vision to utilise technology to make money transfers affordable for the unbanked and underbanked. Dahabshiil is one of the biggest and most trusted money transfer operators in Africa and we look forward to working with them to bring the latest money transfer trends to Dahabshiil’s loyal customer base.”
Learn more at dahabshiil.com and follow them on LinkedIn and Twitter (@DahabshiilGroup).
About RemitONE
RemitONE is the leading provider of money transfer software solutions for banks, telcos, and money transfer operators (MTOs) worldwide. Organisations of all sizes use the RemitONE platforms to run their money transfer operations with ease and efficiency by reaching out to their customers via multiple channels including agent, online and mobile.
For more information on RemitONE, please email sales@remitone.com
RemitONE Liveness Feature™ Coming Soon: Real-Time Biometric Authentication for Digital Money Transfers
We are excited to announce the introduction of the RemitONE Liveness Feature™, brought to you through our collaboration with GBG.
The pace of digital transformation has accelerated remarkably in recent years, driven by the rapid advancements in artificial intelligence (AI). This technological surge has reshaped numerous sectors, offering innovative solutions.
In the healthcare sector, the UK’s National Health Service (NHS) integrated AI-driven facial biometric checks into their mobile app to simplify login procedures, minimising the need for in-person visits and accelerating the onboarding process. Similarly, airlines like Emirates and Delta have also adopted biometric facial recognition for check-in, security clearance, and boarding, streamlining processes and reducing physical contact. These innovations highlight AI’s transformative power in reshaping industries and improving operations.
At RemitONE, we have responded swiftly by introducing the RemitONE Liveness Feature™, to help your business comply with the Payments Services Regulations (PSR). These regulations require strong customer authentication for security, and our new Liveness feature ensures that you meet these standards.
What is the RemitONE Liveness feature™?
The RemitONE Liveness feature™ is an innovative tool that uses advanced biometric facial recognition technology for real-time authentication during customer onboarding when the customer is not physically present.
This technology includes liveness testing, which alongside facial biometrics, detects fraudulent attempts such as deepfake images or silicone masks used during selfie submissions. This ensures that the submitted biometric data originates from a genuine person who is physically present. By integrating this feature into your customer onboarding process, you can mitigate the risk of financial penalties and protect your company’s reputation.
Stay tuned for when this feature will go live. Follow us on LinkedIn and Twitter or subscribe to our newsletter for the latest updates.
Interview with Sid Gautam, Senior Vice President, Flutterwave | IPR Global 2023
We sat down with Sid Gautam from Flutterwave during our IPR Global event, to find out the key challenges and current state of Open Banking and payment processing in Africa, along with the benefits of attending the IPR Global event.
Sid specialises in embedded finance and cross-border payments within CeFi and DeFi domains. Over the years, Sid has managed to grow early-stage and growth businesses to realise their full potential across EMEA and APAC. His area of expertise includes new business development across the length and breadth of the enterprise organisations, alliances, defining go-to-market strategies as well as leading and scaling high-performance business development teams across geographies with a customer-centric approach.
Watch the interview for his expert insights.
Interview with Lindsay Lehr, Managing Director, PCMI | IPR Global 2023
We interviewed Lindsay Lehr from PCMI during our Innovation in Payments and Remittances (IPR) Global event, to share her thoughts on the transformative technologies shaping the global payments market, how Money Transfer Operator’s (MTOs) roles will shift in the coming years, what sets the IPR event apart, and more.
Lindsay is a renowned thought leader in the payments space, advising the world’s most exciting companies including card networks, global marketplaces and payment platforms. Since 2012, Lindsay has managed over 400 client engagements in the payments industry and grew her team of one to today over 50 consultants based across the US, Latin America, Europe, Asia, and South Africa.
Watch the full video to find out her insights.
RemitONE Appoints DTCC as Channel Partner to Bring IPR Events to Saudi Arabia
RemitONE is thrilled to announce our partnership with Digital Technology City for Communication and Information Technology Company (DTCC) to bring Innovation in Payments and Remittances (IPR) Events to the Payments industry in Saudi Arabia.
RemitONE Launched IPR Events in 2018 to bring together payment and remittance professionals to exchange best practices, cultivate profitable partnerships, and drive positive change in the industry through events, training, and research.
Today, IPR is a trusted brand in the global payments space, organising many online, in-person, and hybrid events focusing on FinTech, RegTech, Cross-border Payments, and Remittances, with a special emphasis on technology.
RemitONE and DTCC are proud to be working together to bring a range of modern events – including Training sessions led by industry leaders – to the Saudi Arabian ecosystem of payments professionals.
IPR Saudi Arabia will help facilitate knowledge sharing and network expansion among international and domestic Payments industry professionals in Saudi Arabia.
Based in Saudi Arabia, DTCC, a renowned leader in technology-driven solutions, is dedicated to innovation and efficiency under the leadership of their CEO Mr. Anwar Al Murshed. Bringing a wealth of expertise to the table, Mr. Al Murshed drives impactful strategies to enhance operations and deliver exceptional results.
Saudi Arabia holds a prominent position in the global $22T Cross Border Payments industry.
This robust market, fuelled by rapid innovation, presents vast opportunities for growth and advancement for all supply-chain members.
Commenting on the partnership, Anwar Almurshed, Founder of DTCC, stated, “We are excited to partner with RemitONE to introduce their IPR events to the Saudi market and beyond. By combining DTCC’s local market knowledge and technological capabilities alongside IPR’s expertise, we’ll unite cross-border experts and supply chain members worldwide.”
Aamer Abedi, Chief Marketing Officer, expressed “This is a notable milestone for RemitONE’s IPR brand as we seek to expand our services in the dynamic Saudi Arabian market. We are excited to embark on this journey alongside DTCC whose regional knowledge and Financial sector experience will ensure IPR’s services benefit native businesses. Together, we are confident that our combined expertise will further empower Saudi Arabia’s Fintech and Cross-border payments landscape, advancing digitisation nationwide.”
This collaboration underscores our shared dedication to driving progress and prosperity in Saudi Arabia and beyond. With a strong focus on providing exceptional value and nurturing long-term partnerships, we are excited to enhance the future of payments and remittances.
To never miss an update, follow us on LinkedIn here.
For more information on DTCC, RemitONE or IPR Events, please email marketing@remitone.com.
Interview with Wayne Gould, former Head of Financial Services, Trust Payments | IPR Global 2023
We interviewed Wayne Gould, former Head of Financial Services at Trust Payments, during our Innovation in Payments and Remittances (IPR) Global event. Discover his insights on the event, including how it has facilitated the formation of new connections, strengthened existing ones, and more.
Watch the short interview now!
Saudi Arabia and the GCC: How to Tap into one of the World’s Biggest Payments Markets | IPR Global 2023
Join us for an enlightening panel discussion where our expert panellists will delve into the dynamic landscape of payment and remittance services within Saudi Arabia and the Gulf Cooperation Council (GCC) region.
Discover the latest market trends, regulatory insights, and technological innovations driving this vibrant sector. Gain valuable knowledge about consumer behaviour, cross-border remittances, financial inclusion initiatives, cybersecurity, sustainability efforts, and prospects.
Moderator:
- Ibrahim Muhammad, Payments Consultant, Finxplor
Panellists:
- Yasser Fathi Alkhouli, Chairman & CEO, Labbaik Global Ltd.
- Nadeem Qureshi, CTO, USI Money
- Saif Khan, President – EMEA, BILRS
What makes GCC such a significant region for payments and remittances?
The GCC has emerged as a powerhouse in the payments and remittances sector, with a staggering market value of $140 billion, a stark contrast from its valuation of $25 million in the early 2000s. This exponential growth underscores the region’s economic significance. What makes the GCC even more noteworthy is that two of the top three sending markets globally are from within its borders, namely the UAE and Saudi Arabia, as highlighted by Saif. The interconnection between migration and this surge in the payments market cannot be overstated, with approximately 30% of the world’s migrants residing in Gulf countries. This not only explains the current momentum but also points toward the untapped potential for further expansion. Saif’s insights into the UAE market, boasting around 10 million individuals with 9 million being expatriates, of which almost 60% are from Southeast Asian countries, provide a granular understanding of the diverse demographic contributing to the region’s payment dynamics.
Yasser adds another layer to the discussion by emphasising Saudi Arabia as the fastest-growing within the region. As Saudi Arabia strives to achieve its ambitious goals by 2030, the payments and remittances industry is set to play a pivotal role in shaping the economic landscape of the region.
What are the primary challenges and opportunities for businesses looking to enter or expand into key markets like Saudi Arabia and the UAE?
Entering or expanding into key markets like Saudi Arabia and the UAE presents a nuanced landscape of challenges and opportunities. Nadeem sheds light on the unique dynamics within the GCC, highlighting the differences in how countries operate internally despite shared interests like security and religion. He draws attention to the varying compositions of the migrant population, with the UAE boasting a highly skilled workforce (9 out of 10) compared to Saudi Arabia (4 out of 10), where the majority are labour workers.
Saudi Arabia’s policy to promote local employment aligns with its 2030 vision, however, cultural challenges are prevalent in the market, where large corporations grapple with stakeholders who may not easily comprehend intricate industry aspects. This calls for a need for simplification and effective communication strategies to navigate potential misunderstandings. Furthermore, the creation of new cities with unique laws and regulations essentially will form microcosms of countries within the country. This complex setup unveils opportunities within the sector, but it also demands a meticulous investigation into the business proposition.
Yasser points out the evolving nature of the market, where he specifically highlights Saudi Arabia’s ambitious city plans, such as NEOM, presenting a frontier of opportunities and ushering in a new era. With the planned expansion of the capital, Riyadh is to be five times its current size which signals the potential for businesses to establish a presence in these emerging zones. The country’s demographic consists of 75% under 40, whom are well-educated, which highlights the availability of skilled human capital, further enhancing the appeal for businesses seeking to enter or expand in these key markets. In essence, the challenges and opportunities are intricately woven into the unique fabric of each country, requiring a strategic and culturally sensitive approach for successful market entry and expansion.
How has the Saudi youth adapted to the digital landscape?
The youth’s seamless integration into the digital landscape, evident through active participation in conferences and tech exhibitions, has become second nature. This growing digital presence not only parallels the annual surge in new businesses but also cultivates a tech-savvy and readily available workforce. Yasser points out the restrictions the government has implemented on studying abroad, encouraging individuals to pursue their education domestically, to foster academic growth within the country. Notably, Saudi boasts one of the top 30 universities in the UAE, the King Abdullah University of Science and Technology. The ongoing trend of remote work, accelerated by the pandemic, has simultaneously opened new opportunities for Saudi youth to contribute to various industries from the comfort of their homes.
Despite the prevalence of migrants being employed for labour-intensive roles, Yasser points out the presence of global non-Saudi nationals in sectors like tourism. Recognising this diversity is crucial when analysing workforce dynamics in the region.
The mention of the Umrah pilgrimage, a significant event attended by millions of Muslims, brings attention to the unique religious aspects that businesses must consider. Yasser advises companies operating in the region should align their services with the principles of religion, particularly when catering to events like Umrah, where spending decisions are influenced by religious laws.
How can the payments industry contribute to improving financial inclusion in Saudi Arabia and the rest of the GCC, and what initiatives are currently in place?
Nadeem provides valuable insights into how the payments industry can play a pivotal role in enhancing financial inclusion, particularly focusing on Saudi Arabia. Financial inclusion, as he defines it, involves both participation in various transactional aspects and exerting control over the entire transaction process, from initiation to delivery. However, he notes that gaining approval from the Saudi Arabian Monetary Authority (SAMA) is a prerequisite, making entry difficult. He suggests an alternative route, collaboration with companies involved in different stages of the transactional chain.
The remittances sector poses a unique challenge due to the historical dominance of the top four players, often working closely with local partners. Nadeem proposes separating remittances from acquirers, PayFac, and tech providers, then strategically selecting components that foster financial inclusion. Overcoming hurdles for small and medium-sized enterprises (SMEs) is another focus, given the regulatory mandate for banks to engage with other banks. Nadeem suggests navigating this constraint by leveraging aggregators under the remittance umbrella to facilitate relationships and streamline the process.
Regulatory pressures have led to a reduction in the number of Money Transfer Operators (MTOs). The regulations dictate that to maintain their status, MTOs must refrain from establishing new global network relationships, indicating a shift in how remittances are managed, with a greater emphasis on the banking perspective. This contrasts with the situation in the UAE, where exchange houses wield more influence in the remittance landscape.
What are some incentives for Saudi startups in the Fintech landscape?
Yasser echoes Nadeem’s point that there has been a steady increase in new players and heightened competition in recent years. One crucial aspect is the intersection of regulations and payment products, presenting a significant opportunity for Fintech startups. Drawing parallels with the tourism industry’s success in introducing instalment payments, buy now pay later options, vouchers, and loyalty programs, Yasser suggests that similar tactics could be applied to the payments and remittances market. This strategic approach has the potential to boost transactions by 20-30% annually. While the technology is capable of offering these services, there is less utilisation of it in the current market.
To stand out in the competitive landscape, payment companies should incorporate creativity in diversifying their products and services. By tailoring offerings to resonate with the target audience and provide tangible benefits, companies can foster customer loyalty.
How are Fintech companies and startups contributing to the transformation of the payments landscape in the region? Can you share examples of successful innovations?
Saif provides valuable insights into how Fintech companies and startups are driving a transformative shift in the payments landscape of the region, citing significant growth indicators and successful innovations. Notably, he highlights a remarkable increase in fundraising for startups, with a staggering growth rate of 170% from $35 million in June 2023 to $95 million in July 2023. This substantial investment influx signifies the progress and potential of startups in the region, fueled by ambitious leadership visions such as Saudi Arabia’s 2030 plans and the UAE’s 2050 goals, aiming to double population, economy, and resources.
He further draws attention to the evolution of Fintech solutions, noting the regulatory clarity that now exists compared to the past. Previously, launching a prepaid program was challenging, but today, banking-as-a-service models operate under well-defined regulations, with clear licensing and specifications of their roles and responsibilities.
In terms of corporate expenses, Saif highlights a notable shift from traditional payroll methods to more streamlined processes involving gift cards and multi-currency cards. This transformation has made it easier for SMEs to manage their expenses through the implementation of advanced software and tools, eliminating tedious and time-consuming procedures.
The impact of the Wage Protection System (WPS), mandated by the Saudi Arabian Monetary Authority (SAMA) has played a crucial role in bringing many individuals into the banking sector, including the unbanked and underserved populations, thereby expanding financial services to a broader audience. Moreover, the entry of players from the US and UK markets indicates the global interest and recognition of the region’s fintech potential.
How do you see the adaption of AI and Blockchain technologies within the payments sector in the region?
The status of cryptocurrency, specifically Bitcoin, in Saudi Arabia exists in a legal grey area, it’s worth noting that no penalties or fines are imposed for its use currently. Nadeem suggests that the authorities are cautiously monitoring the situation, acknowledging the potential risks but also recognising the need to stay on top of global trends to meet its 2030 visions. While Saudi Arabia has not outright banned cryptocurrencies, it maintains a vigilant stance.
In contrast, blockchain technology is actively utilised in the GCC region, particularly in crypto-friendly locations like Dubai. Settlements, exchanges, and transactions involving Saudi Arabia often take place through facilities provided in neighbouring countries, such as the UAE. This cross-border utilisation showcases the potential of blockchain technology in facilitating seamless transactions within the region.
AI plays a major role in Saudi Arabia’s 2030 vision. The ambitious plan involves extensive implementation of AI technologies, particularly in new city projects that are heavily technology-driven. Biometrics, contactless payments, and various opportunities in the AI landscape are integral components of this forward-looking initiative.
Yasser points out the imminent surpassing of Saudi Arabia’s 2030 Vision within the next two years and the unveiling of the 2040 Vision in 2025. This rapid evolution indicates the country’s openness to new opportunities and its commitment to continually embrace and expand its technological landscape.
What do you foresee as the future trends and opportunities in the payments space in Saudi Arabia and GCC?
Yasser anticipates the transfer of dynamics from the tourism industry to the payments sector, foreseeing a replication of successful models in the years to come. He emphasises the versatility of Saudi Arabia, noting that consumer behaviour can vary between the northern and southern regions. This regional variability necessitates a thoughtful consideration of tailored products and services to cater to specific preferences in different areas.
Saif predicts a substantial growth in payments, with expectations of doubling or even tripling in the coming years. He highlights a significant shift in payment culture, noting the emergence of strong players in the remittance sector that offer a diverse range of services, such as bill payments and travel cards. While there has been a 35% shift to digital platforms, a substantial 60% of transactions still occur in brick-and-mortar stores. Interestingly, comparing this to the US market, people in the UAE are adapting digitally faster.
The role of population growth, driven by expats, startups, and investors also acts as a key factor in shaping the future of the payments landscape. The increasing economic activity and diversity in the population contribute to the expectation of ongoing growth and evolution in the payments sector.
What next?
At RemitONE, our commitment is to provide you with cutting-edge technology, compliance solutions, and expert guidance to navigate the ever-evolving landscape of remittances. Whether you’re just starting out or looking to scale your business, we’ve got you covered.
Want to see how RemitONE can elevate your business? Book a free consultation with our experts today!