Kholoud Hussein

Embedded finance is rapidly reshaping how financial services are delivered, integrating them directly into non-financial platforms and everyday business operations. At Seamless KSA 2024, this trend is a focal point, showcasing how fintech, retail, and e-commerce are using embedded finance to revolutionize business interactions, driving new growth opportunities and enhanced customer experiences.

Embedded finance enables businesses to offer payments, lending, insurance, and other financial services within their platforms without relying on third-party financial institutions. For example, e-commerce platforms are now providing Buy Now, Pay Later (BNPL) options, giving customers the ability to finance purchases seamlessly. Saudi companies like Tamara are leading the way, streamlining the customer experience and driving higher sales conversions.

This transformation is not just improving user experiences; it’s also boosting business outcomes. According to industry reports, embedded finance is expected to grow by 25% annually in Saudi Arabia, with small and medium-sized enterprises (SMEs) and retailers benefiting the most. By embedding financial services into their platforms, businesses can unlock new revenue streams, improve customer retention, and make transactions more efficient.

Embedded finance is particularly impactful for SMEs, which often struggle to access traditional financial services. Companies like Lendo and Funding Souq are integrating lending solutions directly into business platforms, allowing small businesses to quickly access working capital, helping them grow and compete in a digital economy.

As Saudi Arabia’s digital economy continues to expand, embedded finance is set to play an even larger role in sectors like insurance, wealth management, and B2B transactions. The innovations showcased at Seamless KSA 2024 highlight the potential of embedded finance to become a core part of the Kingdom’s financial ecosystem, benefiting businesses and consumers alike through seamless, integrated financial services.

Kholoud Hussein 

FinTech has emerged as a powerful tool for driving financial inclusion in Saudi Arabia, especially in 2024, as the Kingdom continues its ambitious journey toward a digital economy under Vision 2030. With a growing number of unbanked and underbanked individuals and small businesses, fintech innovations offer solutions extending beyond traditional banking, bringing more people into the formal financial system and enhancing economic participation.

In Saudi Arabia, where small and medium-sized enterprises (SMEs) make up a significant portion of the economy, many face challenges accessing traditional financial services. FinTech has bridged this gap by providing digital banking, lending platforms, and mobile payment solutions that cater specifically to their needs. Companies like STC Pay, Tamara, and Lendo are leading the way by offering innovative financial products that streamline payments, provide access to credit, and enable seamless transactions. According to a 2024 report by Fintech Saudi, the fintech sector in the Kingdom grew by 54% over the past year, significantly increasing financial accessibility for both individuals and SMEs.

Government initiatives have also played a crucial role in supporting fintech’s impact on financial inclusion. The Saudi Central Bank (SAMA) and Fintech Saudi have implemented regulatory frameworks, such as the Regulatory Sandbox, to foster fintech development and ensure financial products are secure, accessible, and compliant. In a recent statement, SAMA Governor Ayman Al-Sayari remarked, “Fintech is central to our vision of an inclusive financial ecosystem. By empowering underserved communities with digital tools, we are creating opportunities for growth and participation.”

Furthermore, mobile wallets like Mada Pay and Apple Pay have made it easier for consumers to manage their finances without needing a traditional bank account. With more than 75% of the population using smartphones, mobile payment adoption is expected to continue rising, bringing financial services to those previously excluded from the formal banking system.

In conclusion, FinTech is playing a transformative role in financial inclusion in Saudi Arabia, breaking down barriers and creating new opportunities for SMEs and individuals alike. As digital financial services expand, Saudi Arabia is well-positioned to achieve its Vision 2030 goals of creating a more inclusive and digitally-driven economy.

Shaimaa Ibrahim

The cashless economy represents a fundamental transformation in the way financial transactions are being processed globally. In Saudi Arabia, the ambitious Vision 2030 targets enhancing financial inclusion and building a digital environment that fosters a non-cash economy.

Startups working in tech-based sectors play a pivotal role in enhancing the non-cash economy and driving digital transformation in the world in general and Saudi Arabia in particular. These startups contribute to developing innovative solutions that change consumer behavior and promote digital payments.

Importance of non-cash economy

The non-cash economy contributes to accelerating payments, reducing transaction times, enhancing the efficiency of commercial businesses, and lowering operational costs. It also provides unbanked individuals and small-sized enterprises a seamless access to financial services. Hence, the Saudi government adopted several strategies to drive digital transformation by fostering innovation in the fintech industry and upgrading e-payments infrastructure, leading to a leap in digital payments in the Kingdom.

According to figures released by the Saudi Central Bank (SAMA), the share of e-payments in the retail sector reached 70% of total retail payments in 2023, up from 62% in 2022. Additionally, Saudi national payment schemes saw significant growth in 2023 as the number of e-payments processed through these schemes hit 10.8 billion, compared to 8.7 billion transactions in 2022.

Startups and non-cash economy

Startups play a crucial role in driving the Kingdom’s shift towards a non-cash economy, thanks to their innovative solutions that transform the pattern of financial transactions.

Here, we showcase the key factors that make startups the driving force behind Saudi Arabia’s non-cash economy:

• Offering innovative solutions. Startups develop new solutions that offer users convenient and safe payment methods and enhance digital payment culture.
• Enhancing e-commerce.  Startups often establish platforms that streamline online purchases and payments by providing safe and flexible payment options.
• Supporting Vision 2030. Startups in Saudi Arabia spare no effort to realize Vision 2030’s goals of enhancing digital transformation, achieving financial inclusion, and diversifying the national economy away from oil resources.
• Promoting cybersecurity. Cybersecurity is a top priority for startups. That is why they invest heavily in upgrading security measures to protect users' data.
• Boosting financial inclusion. Startups provide financial services for individuals and small-sized enterprises that do not have access to traditional banking services, offering flexible payment solutions that cater to the different needs of all categories.

Finally, startups can play a crucial role in realizing Vision 2030 objectives, backed by the Kingdom’s continuous digitization efforts. By tackling challenges facing startups and bolstering cooperation between government and private sector, Saudi Arabia will be able to create a robust digital economy that fosters sustainable economic development.

Translation: Noha Gad

Ghada Ismail

As Saudi Arabia delves into its digital transformation trajectory toward a cashless community, the Kingdom’s payment sector has experienced tremendous growth in digital payments and financial technologies (fintech). 

However, this growth, by default, might have also attracted the attention of cybercriminals, making cybersecurity a critical issue for the financial sector. 

Recognizing the potential threats to its digital economy, Saudi Arabia’s government has implemented a series of regulatory measures to safeguard the integrity and security of the country’s rapidly expanding payment systems.

So, what is the current state of cybersecurity in Saudi Arabia’s payment sector? And what are the key cybersecurity challenges facing the industry, and the government’s regulatory efforts to protect the financial ecosystem from cyber threats? Let’s unfold the whole thing in the coming segments.

The Growth of Digital Payments in Saudi Arabia

Over the past few years, Saudi Arabia has seen a rapid shift toward cashless payments, a natural output of many advances in digital technology and a strong governmental push to reduce cash dependency. 

With digital payment platforms becoming mainstream, more consumers and businesses are conducting transactions online, which has made the payment ecosystem a prime target for cyberattacks. 

Cybercriminals are increasingly sophisticated, using methods like phishing, identity theft, and malware to exploit vulnerabilities in payment systems. Consequently, ensuring the security of these transactions is paramount to fostering trust and protecting the Kingdom's financial infrastructure.

Cybersecurity Challenges in Saudi Arabia’s Payment Sector

As digital payments become the norm for almost the majority of the population in  Saudi Arabia, so too do the risks associated with cybercrime. Some of the major cybersecurity challenges facing the payment sector include:

1. Increasing Fraud and Cyberattacks

With more consumers shifting to online payments, incidents of fraud and cyberattacks have also surged. Cybercriminals target digital transactions, seeking to steal sensitive financial information, such as credit card details and personal identification numbers (PINs). Techniques such as phishing (where attackers deceive users into revealing confidential information) and account takeover attacks have become more common.

Saudi Arabia’s financial institutions are on high alert for these threats. However, the sheer volume of transactions and the increasing sophistication of cybercriminals make it difficult to detect and prevent every potential attack.

2. Data Breaches and Privacy Risks

Data breaches, in which cybercriminals gain unauthorized access to sensitive personal and financial data, pose a significant risk to both consumers and businesses. In the payment sector, a breach can result in the exposure of sensitive information such as bank account numbers, credit card details, and personal identification. This not only causes financial loss but also erodes trust in the digital payments infrastructure.

Given the growing reliance on data in financial services, ensuring that digital payment platforms can securely handle and protect this information is crucial to preventing privacy violations.

3. New Attack Vectors from Emerging Technologies

The integration of emerging technologies such as Internet of Things (IoT) devices and blockchain in payment systems introduces new attack vectors for cybercriminals. As IoT-connected devices are increasingly used for payments, such as smartwatches and other wearables, they can also become entry points for hackers if not properly secured.

At the same time, new fintech solutions must ensure they comply with existing regulations while addressing potential security flaws in their applications.

Government Regulations to Enhance Cybersecurity

The Saudi Arabian government has recognized the importance of robust cybersecurity measures to support the growth of the digital payments sector. Over the last few years, various regulatory frameworks have been introduced to protect consumers, businesses, and financial institutions from cyber threats.

1. Saudi Central Bank (SAMA) Cybersecurity Framework

One of the most significant initiatives has been the development of the SAMA Cybersecurity Framework, introduced in 2017. The framework provides a comprehensive set of standards and guidelines for financial institutions to strengthen their cybersecurity defenses and manage the risks associated with digital payments. It requires banks, fintech companies, and other financial institutions to implement best practices in areas such as risk management, incident response, and continuous monitoring of cybersecurity threats.

2. National Cybersecurity Authority (NCA)

In 2017, Saudi Arabia established the National Cybersecurity Authority (NCA), which plays a central role in overseeing the country’s cybersecurity posture. The NCA collaborates with SAMA and other regulatory bodies to set national standards for cybersecurity across various sectors, including the financial sector.

The NCA is responsible for developing national policies to protect critical infrastructure, including payment systems, from cyberattacks. It also provides guidelines for financial institutions on safeguarding digital assets, detecting potential threats, and responding to cybersecurity incidents.

The NCA’s involvement ensures that cybersecurity regulations are standardized across the country, creating a cohesive defense against cybercriminals targeting digital payment systems.

3. Personal Data Protection Law (PDPL)

The introduction of the Personal Data Protection Law (PDPL) in 2022 marked a significant step toward strengthening data privacy and security in Saudi Arabia. This law governs how personal data, including financial information, is collected, processed, and stored. 

Under the PDPL, businesses, including financial institutions, must obtain user consent before processing personal data and ensure that appropriate security measures are in place to protect this data from breaches.

The PDPL requires payment providers to comply with strict rules regarding data protection and imposes penalties for non-compliance. This law aligns with global data protection standards such as GDPR (General Data Protection Regulation), ensuring that Saudi consumers’ data is protected while using digital payment services.

Technological Measures to Bolster Cybersecurity

In addition to regulatory frameworks, Saudi Arabia’s financial institutions are investing heavily in cutting-edge cybersecurity technologies to protect their payment systems. Some of the key technologies being deployed include:

1. Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML are becoming increasingly essential in the fight against cybercrime. In the payment sector, these technologies enable real-time monitoring of transactions and help detect unusual patterns that may indicate fraud. AI-driven systems can automatically flag suspicious transactions, preventing cyberattacks before they can cause significant harm.

2. Blockchain Technology

Blockchain technology, known for its decentralized and immutable nature, is gaining traction as a means of enhancing the security of digital payments. Blockchain can provide an extra layer of protection by encrypting transaction data and ensuring that payment records are tamper-proof.

3. Biometric Authentication

Biometric authentication methods such as fingerprint scans, facial recognition, and voice recognition are increasingly being used to secure digital payments. These technologies provide an additional layer of security by verifying users' identities based on their unique physical traits, reducing the risk of unauthorized access to payment systems.

Looking Ahead: A Secure Future for Digital Payments in Saudi Arabia

As Saudi Arabia continues to progress toward becoming a cashless society, the importance of cybersecurity in the payment sector cannot be overlooked. With the combination of government regulations, technological advancements, and industry collaboration, Saudi Arabia is well-positioned to create a resilient, secure, and efficient digital payments ecosystem.

By adopting global best practices in cybersecurity and continuously enhancing its regulatory frameworks, the Kingdom is ensuring that consumers and businesses alike can put their confidence in the safety and security of digital transactions. As Saudi Arabia forges ahead with its Vision 2030 objectives, a secure digital payments infrastructure will be essential to building a thriving, modern, and competitive financial sector.

Shaimaa Ibrahim

E-wallets have become one of the key financial innovations in today’s era of digital evolution. They transform the way individuals and businesses process their financial transactions easily and securely, promote financial inclusion, and enhance the quality of life. 

With the growing adoption of technology in all life aspects, e-wallets emerged as an innovative solution that meets the users’ needs. The usage of e-wallets is expected to rise within the upcoming period, triggered by the increase in the number of innovative fintech startups that are expected to contribute to innovating and developing new services to enhance users’ experience.

What is e-wallet?

An E-wallet is an application or platform that enables users to store their funds and make safe and secure financial transactions, including paying for goods and services and receiving money.

Types of e-wallets

• Closed wallet: allows users to store their funds and spend them only with the issuer of the wallet.
• Semi-closed wallet: allows users to easily make transactions at specific merchants and locations. It enables online purchases and allows users within the network to send funds to one another.
• Open wallet: allows users to conduct transactions from anywhere in the world. It can be used for any type of transaction, making it easy to transfer funds and make online and in-store payments.
• Mobile wallet: enables users to make payments through their smartphones.
• Online wallet: mainly used to make online financial processes.    
• Crypto wallet: enables users to store, send, or receive digital currencies like Ethereum and Bitcoin.

Common uses of e-wallets

• In-store payments
• Money transfers 
• Bill payments

Importance of e-wallets

E-wallets are not just a payment method. They play a pivotal role in:

• Promoting financial inclusion.
• Enhancing customers’ experience.
• Facilitating daily financial transactions.
• Raising safety and security.
• Reducing transaction costs.
• Streamlining e-commerce activities.

Finally, e-wallets play a fundamental role in driving the digital transformation of the global financial ecosystem as they enable users to manage funds and make daily transactions seamlessly and securely. This technology has promising opportunities to grow, backed by government support and continued innovations. E-wallets are expected to continue reshaping the payment landscape, enhancing the economy, and making financial transactions easier and more flexible. 

Translation: Noha Gad