The Saudi Arabian Monetary Authority (SAMA), represented by Saudi Payments, has entered into agreement with Vocalink & IBM to develop the new Instant payments system planned for launch at the end of 2020. The development of such system is primarily to promote economic development by increasing the efficiency of the financial system, and increasing the effectiveness of financial transactions among all parties. This will be positively reflected in the acceleration of business transactions and will contribute to the achievement of the initiative to move towards a cashless society, which is central to the development of the financial sector.
This new system allows for the possibility of immediate transfer and scheduled transfers between the various banks in the kingdom real-time with immediate effect. It will also provide greater flexibility for businesses to add payment details and payment instructions to the beneficiary in order to facilitate financial data and help execution of transaction between companies efficiently and provides verification of the beneficiaries in order to facilitate financial settlement, and implement checks and balances of cash management amongst companies and verify beneficiary information, and validate the accounts through the adoption of international financial message standards (ISO 20022). The service will contribute to improving the efficiency of the financial system, such as managing risks, combating money laundering, improving current banking products, and managing cash flows for businesses.
The new platform, which will be developed and operated by Saudi Payments, will play a key role in developing and operating the infrastructure of the national payment systems in the kingdom, and will enable financial technology companies to provide innovative services and solutions that meet the needs and expectations of customers. In addition, it is expected to achieve economic benefits in the very near term by increasing the percentage of digital payments by 15% which will lead to a saving of 16 billion SAR from the cost of cash on the economy during the first five years of operation.
In the long term, this service will enhance the transparency of payments amongst companies and individuals, breed innovative solutions within the financial services through infrastructure flexibility for financial transactions and in accordance with international standards.
The facilitation of digital payments is one of several projects overseen by SAMA as an important step in the execution of the Financial Sector Development Program, in order to achieve the Kingdom's vision 2030, of a cashless society and promoting innovation in the financial sector.