JEDDAH: Saudi fintech startups XSquare, NeotTek, and MoneyMoon have received permits from the Saudi Central Bank to test their solutions in its regulatory sandbox.

The first two companies are authorized to launch an open banking platform, while the third firm is permitted to launch a peer-to-peer lending platform. 

The approval highlights the efforts of the central bank, also known as SAMA, to support sector development and underscores its commitment to promoting financial inclusion and innovation, the institution said in a statement.

With these additions, the total number of fintech companies currently operating under its regulatory sandbox increased to 19, adding that since its launch in 2018, the sandbox has permitted 50 fintechs to test and refine their offerings in a controlled environment, SAMA said in its release.

The Kingdom’s National Fintech Strategy, part of Vision 2030’s Financial Sector Development Program, targets the establishment of 525 firms in the industry, the creation of 18,000 jobs, and a $3.5 billion economic contribution by 2030. 

The financial authority has also released the second update under the Open Banking Framework, which focuses on the Payment Initiation Service.

This initiative is part of SAMA’s efforts to further bolster the Saudi fintech ecosystem and is expected to improve consumer experience and transaction efficiency while creating new opportunities for the Kingdom’s fintech sector to offer a broader range of products and solutions, as per a separate statement.

SAMA’s Open Banking Framework provides a set of guidelines and technical standards grounded in international best practices to foster financial technology innovation services in the Kingdom.

The second release of the framework establishes standardized procedures for offering Payment Initiation Services in a reliable and secure manner. It also outlines the responsibilities of all parties involved in delivering PIS.

Saudi Arabia’s financial technology startups have secured over $1.84 billion in venture capital investments since 2018, according to the latest official SAMA report.

Saudi Arabia’s General Authority for Small and Medium Enterprises, also known as Monsha’at, said that since the launch of the Fintech Saudi initiative, the sector has flourished and investments have been directed into 216 firms, which now employ over 6,500 people. 

This significant capital influx underscores the rapid growth of the nation’s fintech sector, now the largest in the Middle East and North Africa region.