Saudi Arabian Monetary Authority has announced that the consumers in Saudi will be able to shop online using their debit cards (also known as mada cards in the country) starting April 1, 2018. The decision comes after successful tests of the service with some partners, the authority said yesterday.
The decision has been made to encourage and use of electronic payments as the preferred payment method. This could be a game-changing decision and give a big boost to ecommerce sector of the country that has been showing great signs of growth lately and according to a report is set become a $22 billion market by 2022.
There are currently more than 29 million debit cards in the country, which is the highest number of cards in the entire region, SAMA said in a statement. It’s obvious that many of those debit card holders are already using credit cards to shop online but it would be safe to assume that a big number of them prefers cash on delivery or does not even shop online.
That will change with this decision. All the users who for some reason were not able to get a credit card will now be able to use their standard debit cards for online transactions.
“Our objectives in the Mada National Payment System are to maintain the progress and development of our payment systems with the direct support of our member banks and payment system partners, and to provide advanced electronic payment services,” said Ziyad Al-Yusuf, Director General of of Payments System at at SAMA, .
An important thing to consider here is that the employers in Saudi (by law) are required to transfer salaries of their employees to their bank accounts only, which means everyone who is part of the workforce has a bank account (and a debit card). So with this measure, Saudi Arabia Monetary Authority is essentially enabling majority of population (citizens and expats) of the country to make online purchases using the same bank accounts.
After the activation of the service on April 1, the Saudi Arabian Monetary Authority expects ecommerce platforms to offer it as a payment method within next three months.