Saudi Telecom Company to offer digital wallet service in an effort to diversify
Saudi Telecom Company (STC), Saudi Arabia’s largest telco, is launching its first FinTech platform in the kingdom next month, to tap about a third of the population that is unbanked.
In 2017, there were 6.4 million unbanked adults in Saudi Arabia, out of a population of 21 million adults, according to the World Bank.
“STC Pay is a FinTech platform. It will help our customers to transfer money whenever they want and they can immediately authenticate whether the money is received on the other end or not,” said Tarig Enaya, senior vice president of enterprise at STC.
“Our main aim behind entering this business is to connect people and address the unbanked community in Saudi Arabia that is in millions.”
In an increasingly competitive market, STC is diversifying its services to retain and acquire new users. The country’s telecom sector profit will drop 1.4 per cent to 9.3 billion Saudi riyals this year due to a challenging market environment, according to a report by NCB Capital, the investment arm of National Commercial Bank, the kingdom’s largest lender.
STC has already completed successful trials of STC Pay and the company will place a full demonstration at GITEX Technology Week in Dubai in October.
The app is a digital wallet that allows STC customers to access basic financial services through their phone. Customers can download the app from the Apple Store or Google Play, and carry out transactions by visiting STC kiosks or authorised shops. After scanning a barcode at the cashier and providing cash, customers can select a name from their contact list, press “send” and the money will be available within seconds in the individual’s own STC Pay account.
STC Pay is part of the operator’s drive to offer value-added services to its customers.
“Saudi Arabia is home to many nationalities and our goal is to bring remittances of those people, who are basically unbanked lower class workers, to such platforms,” said Mr Enaya.
Workers in the kingdom remitted about $37 billion to their home countries last year, according to the Saudi Arabian Monetary Authority.
“We have got the Sandbox license and we have partnered with a bank to hold the overall cash, but the internal transactions within our registered community will be handled by STC.”
A regulatory Sandbox is a framework that facilitates the development of the FinTech industry.
STC’s gross profit for the second quarter of 2018 ended June 30, reached 7.11bn riyals, an increase of 2.9 per cent compared with the corresponding quarter last year.