Abdullah Al-Othman, Founder & Chairman, Geidea • Interview

Alongside a young population, growing access to financial services, and high smartphone penetration, COVID-19 has accelerated cashless transactions, benefitting firms like Geidea.

What impact has Geidea seen from COVID-19 in volumes and types of cashless transactions?

The first few weeks of the pandemic were extremely challenging, and many industries saw a massive drop in activity, especially retail, hospitality, and real estate. We are fortunate that the government reacted both quickly and decisively by pushing and mandating digital acceptance in small shops, as well as for all deliveries. Furthermore, the authorities also supported many businesses by financing some of the costs on behalf of merchants, a major example of the commitment to make Vision 2030 a reality. This had a massively positive effect, with the number of digital transactions increasing significantly in comparison to pre-COVID-19 levels, as well as the average transaction value going down by 25%. The latter could be erroneously perceived as a negative indicator, but it is actually an extremely strong sign that many buyers now rely on digital payments for most of their purchases, as they were only using cards for higher transactions earlier.

Geidea has been extremely successful in graduating from the SAMA fintech sandbox and getting licenses. What allowed you to achieve this?

The shared vision between management, our shareholders, and myself has truly made this a reality. From the beginning, we focused heavily on investing in our people and technology, as well as understanding how we can meet the needs of merchants. We also went through this journey hand-in-hand with Saudi Payments and SAMA, by building both mutual respect and trust along the way. These factors allowed us to cement our position as one of the largest service suppliers in Saudi Arabia and the wider Middle East. Today, we have more than 75% market share in the sector, amounting to over 500,000 terminals and serving more than 100,000 clients. Moving forward, our goal is to leverage our licenses to offer a seamless and intuitive experience to smaller traders and companies, with a complete suite of payments, e-commerce, and business management tools aimed at growing and scaling their businesses. Today, we can on board businesses in minutes and deliver our terminals on the same day that merchants request it.

You have two arms, Geidea Banking Business (GBB) and Geidea Merchant Business (GMB), which offer tools to SMEs and clients. What digital tools make Geidea attractive to SME customers?

Our Geidea application is really the core of our ecosystem: it brings merchants onboard in minutes, lets them manage orders, send e-invoices, and take payments or simply gives them access to their balance in real time, across all channels. No one else in the country gives small merchants an omnichannel experience with such a seamless experience.

Are the changes that have swept the Saudi digital payments sector recently long lasting, or will people return to cash?

We firmly believe these changes are here to stay. Digitalization was already in force pre-COVID-19; however, it has been accelerated because of the pandemic. Many pre-existing factors will continue to push this transition, such as a young population, access to financial services, and high smartphone penetration. The difference now, however, is that the increased convenience of digital payments and the growing reluctance to handle cash or a payment terminal is pushing for the adoption of digital and contactless payment methods to even greater heights.

Saudi Arabia has explicitly encouraged the payments space with a number of regulatory and policy decisions. What recent changes have you found most beneficial?

The creation of Saudi Payments with a clear positioning as an enabler for the market was remarkable, as the Kingdom now benefits from a more efficient and better priced card-based system. The recent introduction of instant payments is also opening the doors to an even-more promising future for the payment space, as the reduced fee and increased speed will create opportunities to pay merchants faster and more often. This will also contribute to supporting their cash flows financing and help boost business in the country. We are currently living in a world where everyone expects quicker payments in real time, and these changes will help meet these needs.