Saudi Arabia sees 14% spike in remittances amid digital transformation

Saudi Arabia saw a 14 percent annual increase in remittances by expatriates in April, with the total amount reaching SR11.35 billion ($3.03 billion), the latest data showed.

Meanwhile, payments from Saudis, which constitute 30 percent of total personal transfers, saw a 30 percent increase during this period, totaling SR4.94 billion, according to the Saudi Central Bank, known as SAMA.

This increase can be attributed to several factors, primarily the launch of new development projects leading to higher employment rates, improved economic conditions resulting in greater disposable income, and the digitalization of transfer platforms.

Moreover, regulatory reforms, including the digitization of employment contracts, virtual court hearings, and online government services, have modernized legal governance and enforcement practices.

These initiatives are part of broader efforts aimed at positioning the Kingdom as a leader in ease of doing business.

Remittances refer to cross-border payments to family or friends and are often associated with migrant workers sending money back to their communities of origin.

The Saudi remittance market is experiencing a transformation driven by the rise of digital payment companies and fintech startups.

Among the fastest-growing cross-border money transfer entities, stc pay and several other firms have received digital banking licenses for the first time in the country.

Additionally, regulatory bodies in Saudi Arabia and the Middle East and North Africa region have played a crucial role in fostering the growth of such services. They have introduced supportive policies to ensure consumer protection, promote competition, and create an enabling environment for digital financial services.

A February study by IBS Intelligence also shed light on the growing demand for purpose-driven remittances, highlighting a shift toward specialized money transfer services that cater to specific needs rather than generic cash transfers.

According to the findings, Prepay Nation occupies a central position in integrating billions of customers from emerging economies into the formal financial system, facilitated by the burgeoning prepaid market.

This market expansion, according to the research, not only fosters financial inclusion but also ensures a stable income stream and mitigates risks for both customers and businesses.