SADAD Payment System United Nation Public Service

Transcription

1 United Nation Public Service New York, June 23, 2008

2 Bill payment in Saudi Arabia has evolved during the last three decades and passed through four stages Bill Payment Timeline in Saudi Arabia Beginning Problem Solution Reform 1980 s 1990 s 2000 s 2

3 The first stage started in the beginning of the 1980 s when SAMA mandated that all banks should accept bill payment at their branches Beginning Problem Solution Reform 1980 s 1990 s 2000 s 3

4 The first stage started in the beginning of the 1980 s when SAMA mandated that all banks should accept bill payment at their branches (cont.) 1980 s SAMA mandated banks to accept bill payments at branches Utilities' Revenue Was Government Electricity Telephon e Water Revenue Customers only have bank branches and utility offices to pay Limited Number Of Bills Manual Collection Process Bank Branches Utilities Offices 4

5 The second stage started when the number of bills paid in Saudi Arabia increased rapidly which led to consumers complaints due to inefficient and time consuming payment process Beginning Problem Solution Reform 1980 s 1990 s 2000 s 5

6 The number of bills has increased with the introduction of mobile telecom services and liberation of the telecom market which led to consumer complaints regarding bill payment s Top Consumer Issues Concerning Bill Payment The number of utility bills has grown from 70M in 2000 to 250M in 2007 Telecom moved from quarterly billing to monthly Mobile telephone service was launch Number of services require regular payments grew from 5 billers to 100+ Government services grew to about 60 million annual transactions Time consuming Delays/Loss in postage Disconnection of service due to delays in bill processing Overlooking payment dates Inconvenient Handling large cash amounts 55 Having to keep track of multiple bills Number of mentions, Time Consuming =100 6

7 With time banks started to link electronically with utility providers to open new electronic channels to consumers but that only led to a slight improvement in the consumer experience in bill payment s Pre SADAD Bill Payment Network Consumer Electricity Bank A Telecom Bank B Water Bank C Government Bank D Manual collection process slowly shifted to electronic process This direct links model prevented many billers from entering this payment network Banks resisted any new billers since there is no financial incentive to do so This model could not be sustainable due to increasing growth in transaction numbers and high entry barriers Government Government Government? 7

8 In the third stage SAMA introduced SADAD to allow consumers to pay using all the banking channels and opened the network to billers Beginning Problem Solution Reform 1980 s 1990 s 2000 s 8

9 It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels at a low cost 2000 s Pre SADAD Bill Payment Network SADAD EBPP Model Consumer Consumer Electricity Bank A Biller A Bank A Telecom Bank B Biller B SADAD Bank B Water Bank C Government Bank D Biller N Bank N Government Government? Government 9

10 It was clear that there was a need for a centralized system that acts as an interface between billers and banks, so billers can use the banking channels at a low cost 2000 s Centralized and shared infrastructure SADAD EBPP Model Provides all Billers with access to Banks channels without discrimination Consumer increase transparency of government collection process significantly reducing the time spent by Biller A Biller B SADAD Bank A Bank B consumers paying bills Improve availability of from days to Biller N Bank N only 1 business day 10

11 SADAD offers three major product through all banking channels (ATM, Phone Banking, Internet Banking and Branches) SADAD Products And Delivery Channels Bill Payment Prepaid Services Electronic Vouchers SADAD All Saudi Banks Automated Teller Machines Online Banking Phone Banking Banks Branches Point Of Sale Consumers 11

12 , SADAD has reformed the payments market by introducing a full array of payment products that is accessible to every consumer in Saudi Arabia Beginning Problem Solution Reform 1980 s 1990 s 2000 s 12

13 With every month that passes SADAD expands its network by adding more banks and billers, by January 2008 SADAD linked 28 billers and 12 banks, and expected to reach 50 billers and 15 banks by end of 2008 SADAD Network Growth Billers and Banks Banks Billers 13

14 SADAD linked 40 billers so far, and working with 40+ more (government and private) to integrate with its system soon SADAD service has reached many sectors Telecom Electricity Water Insurance Credit Cards & Loans Customs Stock Market Information Civil Services Government Funds SADAD Sectors Served Zakat (Tax) Commerce Chambers Internet Service Providers Airlines Municipalities Postal Services Press Agencies Installment Universities 14

15 The number of bills paid in SADAD grew steadily in to reach a record 5.6 million bills paid in March 2008 alone, and SAR 2.4 billion were paid in May 2008 SADAD Monthly Payments Transactions Volume (in,000 payments) SADAD Monthly Payments Transactions Value (in SAR,000,000) 15

16 The majority of bills paid in Saudi Arabia are paid through SADAD, which shifts consumers behavior by moving them from physical channels (branches) to electronic channels (ATM, Phone Banking, and Online Banking) where branches usage went down from 73% to 12%... SADAD Channels Usage Trends SADAD Market Share Trends Branch ATM Phone Internet 16

17 SAMA has used different strategies that insured success in building and operating Study International Experience Adapt For Local Needs Acquire Experienced Assistance Hire Skilled Individuals Flexibility to adopt to market needs Conduct Market Research Eliminate Subsidies Develop A Sustainable Financial Model 17

18 Thank You 18