Payfort, a unit of the online retailer Amazon, was granted licence by the Saudi Arabian General Investment Authority to operate as wholly-owned payments solutions company in the kingdom. The company intends to tap the rise of e-commerce and growing demand for online transactions in the Arab world's biggest economy.
“Recent initiatives to further diversify the Saudi economy and grow hitherto undeveloped economic sectors, such as entertainment and tourism, are likely to help accelerate an already fast growing digital payments market,” said Omar Soudodi, managing director of Payfort.
Saudi Arabia and the UAE are among the fastest growing markets in the region for electronic payments, according to a 2017 report by Payfort. The value of electronic payment transactions in Saudi Arabia grew 27 per cent year-on-year in 2016 to $8.3 billion, it found.
Payfort said the value of electronic payments in the kingdom is expected to double in the next four years to reach more than $22bn.
“Payfort’s new company registration as a foreign investor in the kingdom of Saudi Arabia is a sign of our long-term commitment to the market and comes as a result of our efforts to support the rapid growth in the country’s online sectors,” Mr Soudodi said.
The kingdom registered as the fastest-growing country within the region's airline and travel sectors during 2016, reporting 21 per cent growth in airline payment volume and 36 per cent growth in travel and tourism, Payfort said. Saudi Arabia's events and entertainment sector holds huge potential for growth, the company said.
As part of the social and economic reform drive known as Vision 2030, the kingdom set up the General Entertainment Authority and plans to spend $64bn in developing the entertainment industry in the country where about 70 per cent of the population is below the age of 30.
The permit granted to Payfort is the first foreign business license of its kind issued to a payment services operator by Sagia.