During LEAP 2022, Ahmed Alenazi, stc pay CEO, had an exclusive interview with Telecom Review where he talked about the journey of being a technology-based company that delivers fully digital services. As one of the largest fintech unicorns in the Kingdom, the executive shared how the country’s fintech sector will thrive further, with stc pay as a leading player.
stc pay is evolving from being a mobile wallet into a digital bank. How did this impact the overall corporate and business growth?
We started in 2018 as part of the sandbox introduced by the regulator (central bank of Saudi Arabia) which allows players like stc pay to come and test their services and serve clients in a controlled environment. This was the beginning. We were focused on serving consumers in Saudi, with a unique proposition starting from a very simple wallet with multiple sets of features.
In 2020, we gained our first electronic money institute (EMI) license. Growing further, we got Western Union as one of our partners to provide remittance service where it bought 15% shares at a $1.3 billion valuation, making stc pay the first and largest fintech unicorn in the Middle East.
From then until today, we are serving more than 7.8 million users with 3.7 million cards in the market. Despite being focused on the Saudi market, we cater to the international market via remittances and unique services. In remittances, we are talking about international payments which are very complicated due to different regulators and currency conversions. Yet, we made it easy. You can send, amend, track, and cancel the transaction at any point in time and get refunded instantly. Nobody will find all combined services around the world, making stc pay unique in its services.
At the end of Q2 2021, we got the approval from the government to convert stc pay to be a bank, and now we are still in the process of conversion where we will be known for a better user experience and unique value proposition with big ambitions in the future.
As one of the unicorns in the industry, what exciting plans do you have in store for 2022?
For one, we are in the process of finishing up our paperwork and requirements to the regulator and launching as a bank, providing very unique products and services that the consumer needs. As an example, early this year, we launched Qattah, which enables users to split payments. If you go with your friends and pay for dinner and you ask people to share, this can be used and we made it very unique. Consumers can even ask for Qattah in advance if they are traveling.
We are just serving consumers at the moment, as we partner with local banks. Later on, we plan to expand for large-scale payroll as we still cater only to companies with 30 employees or less. We are very focused and we don't want to jump into multiple things. We want to provide the right and unique service that consumer needs — whether an enterprise or individual. Hence, we are following a very clear strategy. We know exactly what we're doing and we will carry on doing that because ideas are always there. The hardest thing is converting that particular idea to reality and having a very strong use case for consumers.
What makes fintech ideal for business and consumers, and how did LEAP become an avenue for it?
Technology has been growing very fast. I think this is something good for consumers to capitalize on and make their life very easy — from watching TV or reading the newspaper physically to reading digitally or watching on-demand like Netflix and others. These activities show a full change in consumer behavior.
Previously, they are willing to wait for days or hours to get a service, which now requires instant and simultaneous offerings. Fintech will definitely come and help consumers get their products and services, with speed and easiness. In financial technology or fintech, it’s important to point out that it's not the technology that is driving us but we drive the technology based on the user persona and consumer needs to serve them properly.
I think this will carry on and will continue to advance as today you see different technologies emerging. I do believe fintech will stay and grow exponentially. Firstly, the beauty, especially about the Saudi market is the youth generation where 70% are below the age of 35 and 40% are below the age of 18. Secondly, smartphones and 5G adoption and combination are already there, in addition to the support by the government with regulations in place like a sandbox where they welcome innovative ideas from anyone.
Thirdly, the Saudi Vision 2030 also includes a whole program about financial service development. One of them is reducing cash or reducing friction around the financial services to make it easy for people. The fourth success factor is the eKYC infrastructure already present within banks and other related entities.
As a Saudi national, I want to see many fintech unicorns coming, creating a Silicon Valley in the region — a world that provides seamless financial services and other services from Saudi.
What we can see from LEAP as well is that there are a lot of young Saudis and a lot of international players talking to the young generation which is very motivating. They have that passion to do a lot of activities. I believe that nobody can stop someone that has a passion to deliver something, and the LEAP event is only a start.
Today, we know where we are heading, we have all the support to do it, and we have passion along with it. You will not find this combination anywhere, and here in KSA, we will do it by all means.
What is your perspective on the thriving fintech sector within the Kingdom in the next few years?
It will grow from having only a couple of players now. In the near future, it would definitely expand with the surrounding ambitions as well as the momentum and consumer needs. This is something that will not stop. You will see a lot of fintech players from Saudi going into different markets and serving consumers beyond the country.
Do you think being part of stc Group helped you to grow fast?
Definitely. stc is a very recognized and trusted brand. Aside from this, we added Western Union, Visa, mada, along with different players in the market such as banks to fintech service providers, which gave more confidence from the consumers and regulators.
It’s already planned from day one to put stc as part of the brand name to gain trust and then gradually add different financial players on top of it to gain trust from the consumers for the newly-established company.
This gave us the trust, momentum, and the easiness of reaching consumers and providing financial services which were, at that time, new for a telco group. This is why we are now becoming the largest fintech player in the Middle East, the first financial unicorn in the region, serving more than 7.8 million users.