November 2021
- The Saudi Arabia Remittance market is
anticipated to grow at a CAGR of 2.8% during the forecast period
FY’20-FY’25.
- Growth of digital payments solutions, along
with rising fintech ecosystem are further expected to give a boost to
numerous entities that facilitate online payments in the country.
- Opening of the market to allow foreign MTOs
will encourage entry of new players in the oligopolistic remittance market
Saudi Arabia is one of the most
economically prosperous country in Asia and hence is a prominent emigration
destination to a many South Asian countries. Of the current population of 33
Million, more than 37% of population comprises of expats with India, Pakistan,
Nepal, Philippines, Bangladesh, Sri Lanka and Egypt being key source countries.
This results in a high contribution of outbound remittance in the industry as
the expats send money to their home country periodically.
Due to increased focus on hiring
Saudi nationals at higher level posts, more and more people are looking to move
from Saudi Arabia. This led to a decline in the remittance industry size by
value. However post-COVID the scenario has reversed due to higher propensity to
save.
Until 2019, the foreign MTOs were
not allowed to set up business independently. But based on G20 National
Remittance Plan, Saudi Arabia has opened the markets for foreign MTOs which
will boost the industry growth.
How is the competitive
landscape in International
Remittance Industry of Saudi Arabia?
The Saudi Arabian Remittance
market is dominated by major 7-8 which are providing remittance services from a
very long back. A very high amount of capital would be required to make
any position in the oligopoly remittance market of Saudi Arabia. More than 95%
of the remittance market is hold by 8 firms and the competition has been
growing largely since the increase in penetration of digital channels. Entry of
STC pay has gained a substantial market share since it begin their operations
and all other banks are now focusing on strengthening their digital channels.
In Saudi Arabia, foreign MTOs
were not allowed to open their branches and providing remittance services
independently in the Kingdom. Since 2019, the plan have been introduced but
there are many rules and regulations which are to be followed for the foreign
money exchanges. The paid up capital has not been standardized for the foreign
players and it is to the discretion of Saudi Central Bank SAMA. This means that
the entry barriers are high for the remittance industry in the Kingdom.
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What is the
future takeaway for industry players?
Given the backdrop of increase in
volume and value of outbound international remittance transactions, analysts at
Ken Research expect a growth of 4.5% during 2020-21 and CAGR of 2.8% during
2020-25F.
During this period, value of
transactions is expected to peak in 2025 which will be driven by the opening of
the market for foreign MTOs and growing adoption of digital solutions.
Analysts at Ken Research further
expect that digitalization of services and corresponding marketing campaigns
are expected to drive the revenue of remittance industry at a CAGR of 3.1%
during 2020-25F
Key Topics
Covered in the Report
Overview of International
Remittance Industry in Saudi Arabia (Statistics on Corridor wise Transaction
volume and value)
Industry segmentation (By Type of
Transfers, Corridor wise)
Cross Comparison of Major players
on Operational and Financial Parameters (December 2020)
Company Profile of Major Players
(Overview, Products and Services, USP, Business Strategies, Branch wise
Operational Performance, Cumulative Financial Performance, Recent Developments)
Growth Drivers and Challenges
to Saudi Arabia International Remittance Market
Industry trends and developments
Risk factors in the industry
Rules and Regulations by
Government Bodies
Impact of COVID-19 and Future
Outlook of Industry
Related
Reports:
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing &
Communications
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