JEDDAH: The coronavirus disease (COVID-19) pandemic was the catalyst for a massive decline in cash payments in Saudi Arabia, according to the CEO of a leading online shopping platform.
The Kingdom expected non-cash transactions to account for 70 percent of all deals by 2030, but Noon’s Faraz Khalid told delegates at the fourth Future Investment Initiative (FII) summit that Saudi customers had already overcome their shyness toward digital payments.
Speaking at the Riyadh conference, the chief executive of Noon, which is backed by Saudi Arabia’s sovereign Public Investment Fund (PIF), said: “Three-quarters of transactions in this market used to be cash on delivery, pre-COVID-19. (On April 14) suddenly we have to invent, as cash was sort of banned, and that evening we went from three-quarters cash to zero percent cash.”
A few months later, cash was once again accepted into the system, but the transformation had already taken place and cash payments dropped from accounting for two-thirds of transactions to just one-third in the space of six to eight weeks.
As a result of the shift, Khalid said there was the potential for a variety of digital payment platforms to enter the market, such as online wallets and financial technology products where people could purchase items and pay later.
Noon has witnessed a surge in demand for its products during the COVID-19 pandemic, with users going from shopping once or twice a year to ordering their daily necessities through e-commerce portals.
“We saw a vast majority of our customers become active, savvy, online shoppers. We predicted that shift over many years, but it suddenly happened in weeks,” Khalid added.
PIF’s Noon.com targets millions of online shoppers as part of annual sales pushDanube Online lists nongrocery items on Noon.com