JEDDAH: Saudi Arabia this month will introduce a new inter-bank money transfer system, which will allow payments to be processed faster between local banks, helping to foster growth in the Kingdom’s rapidly developing e-commerce industry.

The system will allow money to be transferred between local banks 24 hours a day and at more advantageous rates.

According to Talat Zaki Hafiz, an economist and board member of the Saudi Financial Association, instant electronic payments are defined by the Euro Retail Payments Board as electronic retail payment solutions that are available 24 hours a day, seven days a week and 365 days a year, with the payments processing between accounts in a matter of seconds.

Hafiz pointed out that the processing of local payments was previously confined to bank business hours and could not take place outside these hours or during weekends and holidays. The new system, when introduced later this month, will mean these restrictions will no longer exist.

The new scheme comes as it was reported last month that digital payment transactions in the Kingdom jumped by 75 percent in 2020 as Saudi consumers embraced online shopping during the coronavirus disease (COVID-19) pandemic.

Point of sale (PoS) refers to a place where customers can execute payments for goods or services. This can be a credit card in a clothes store or a digital payment through a food delivery app.

The total number of PoS operations in 2020 amounted to about 2.8 billion, an increase of 75 percent, while the value of the transactions amounted to about SR349 billion ($93.7 billion), an increase of nearly 24.1 percent compared with the same period in 2019.

Unsurprisingly, the number of PoS devices operating in the Kingdom rose sharply by the end of 2020 to more than 700,000, an increase of about 70 percent since the beginning of the year.

Hafiz told Arab News that the new scheme coming this month would help support the growth of digital payments and the surge in e-commerce. “Such payment solutions will not only speed up the movement of money between clients’ bank accounts but also help e-commerce to grow, since it ensures making speedy payments of goods and services to the merchants, which, in turn, makes shopping much easier and enjoyable,” he said.

Evidence of the growth of the e-commerce sector was seen during the Black Friday sales late last year. A survey carried out by advertising platform Criteo of 900 Saudi online consumers found that around 40 percent of respondents said they planned to buy more products online, with household products, groceries, and beauty and hygiene items proving most popular.

Alistair Burton, country manager, Middle East and Africa, at Criteo, said: “The events of 2020 made it an extraordinary year for e-commerce. Our research shows that this year consumers will swap door-buster deals for online discounts that start sooner and last longer.”

Overall, the research found that 58 percent of Saudi respondents were more comfortable shopping online in 2020 than in-store.