the world bank international advisory group for government payments technical meeting – rome,...
TRANSCRIPT
The World Bank International Advisory Group for Government Payments
Technical Meeting – Rome, Italy June 20-21, 2011
SADAD Payment System
By Abdulmalik Alsheikh
SADAD Payment System
Bill payment in Saudi Arabia has evolve during the last three decades and passed through four stages…
2
Beginning
1980’s
Problem
1990’s
Solution
2000’s
Reform
Today
Bill Payment Timeline in Saudi Arabia
SADAD Payment System
The first stage started in the beginning of the 1980’s when SAMA mandated that all banks should accept bill payment at their branches…
3
Beginning
1980’s
Problem
1990’s
Solution
2000’s
Reform
Today
SADAD Payment System
The first stage started in the beginning of the 1980’s when SAMA mandated that al banks should accept bill payment at their branches…
4
1980’s
• SAMA mandated banks to accept bill
payments at branches
• Utilities' Revenue Was Government
Revenue
• Customers only have bank branches
and utility offices to pay
• Limited Number Of Bills
• Manual Collection Process
Electricity Telephone Water
Bank BranchesUtilities Offices
SADAD Payment System
The second stage started when the number of bills paid in Saudi Arabia increased rapidly which caused consumers complaints due to inefficient and time consuming payment process
5
Beginning
1980’s
Problem
1990’s
Solution
2000’s
Reform
Today
SADAD Payment System
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...
6
1990’s
• The number of utility bills has
grown from 70M in 2000 to
250M in 2007
• Telecom moved from quarterly
billing to monthly or bimonthly
• Number of services require
regular payments grew from 5
billers to 100+
• Government services grew to
about 60 million annual
transactionsNumber of mentions,
“Time Consuming” =100
Having to keep track of multiple bills
Time consuming
Delays/Loss in postage
Overlooking payment dates
Disconnection of service due to delays in bill processing
Inconvenient
Handling large cash amounts 55
63
63
100
67
72
52
0 20 40 60 80 100
Top Consumer Issues Concerning Bill Payment
SADAD Payment System
In the third stage SAMA introduced SADAD to allow consumers to pay using all the banking channels regardless of the bank and opened the network to every biller…
7
Beginning
1980’s
Problem
1990’s
Solution
2000’s
Reform
Today
SADAD Payment System
With time banks started to link electronically with utility providers to open new electronic channels to consumers but that only improved little the consumer experience in bill payment..
8
Pre SADAD Bill Payment Network
Electricity
Telecom
Water
Bank A
Bank B
Bank C
Government Bank D
Consumer
• Manual Collection Process Slowly Shifted To
Electronic Process
• This direct links models prevented many
billers from entering this payment network
• Banks resisted any new billers since there is
financial no incentive to do so
• This model could is not sustainable due to
increasing growth in bill payment
transactions, high entry barriers and indirect
subsidies by banks to billers
2000’s
SADAD Payment System
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 with low cost…
9
SADAD EBPP Model
SADAD
Biller A
Biller B
Biller N
Bank A
Bank B
Bank N
Consumer
Pre SADAD Bill Payment Network
Electricity
Telecom
Water
Bank A
Bank B
Bank C
Government Bank D
Consumer
2000’s
SADAD Payment System
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 with low cost…
10
SADAD EBPP Model
SADAD
Biller A
Biller B
Biller N
Bank A
Bank B
Bank N
Consumer
• Centralized and shared infrastructure
• Provides all Billers with access to Banks
channels without discrimination
• increase transparency of government
collection process
• significantly reducing the time spent by
consumers paying bills
• Improve availability of collected Money
from 14-60 days to only 1 business day
2000’s
SADAD Payment System
Today, SADAD has reformed the payment market by introducing a full array of payment products that is accessible to every consumer in Saudi Arabia
11
Beginning
1980’s
Problem
1990’s
Solution
2000’s
Reform
Today
SADAD Payment System
Today there are four major products offered through all the banking channels (ATM, Phone Banking, Internet Banking and Branches)
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SADAD Products And Delivery Channels
Bill Payment
Prepaid Services
MOI Services
Automated Teller
Machines
Online Banking
Phone Banking
Banks Branches
Consumers
Refund
SADAD Payment System
SADAD Network Growth – Billers
SADAD expanded its network through on-boarding a total of 104 billers as of Q1 2011
13
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
11
1721
2733
41 44
50
59
65
7580 81
92
99 100104
SADAD Payment System14
Different billers in various industries have been linked indicating SADAD’s ability to serve all sectors that require electronic payment services
Credit Cards
Stock market information
Chambers of Commerce
Department of Zakat
Government funds
Customs
Insurances
MinistriesInitiatives & Projects Telecoms Utility
ServicesISPs
AirlinesPost Services Media InstallmentsUniversitiesMunicipalities
Passport Department
Driving License
Traffic Violation
Labor Importation
Personal Loans
Press
Government Billers 51%
Government Billers 51%N o n - G o v e r n m e n t B i l l e r s 4 9 %
Non -Government Billers 49%
SADAD Payment System
SADAD Quarterly Payments Transactions - Volume (in ,000 payments)
The number of bills paid via SADAD grew exponentially to reach a record 28.5 million bills paid in Q1-2011.
15
2007 2008 2009 2010 2011
2,0312,990
4,804
9,054
15,59516,201 16,415 16,114
17,17217,765
14,999
17,768
20,244
25,137 25,586
27,91928,549
SADAD Payment System
Government Payment Volume
Government Vs. Non Government payment Volume
16
68%
32%
Non Government
Government
SADAD Payment System
SADAD Quarterly Payments Transactions – Value (in 000,000 SAR)
The total value for the quarterly transactions hit SAR 21.65 billion in Q1-2011.
17
2007 2008 2009 2010 2011
8281,243
2,426
4,441
6,666
7,5258,958 8,645
7,975
10,28811,285
14,106 13,837
17,813
19,086
21,941 21,651
SADAD Payment System
Government Payment Value
Government Vs. Non Government payment Value
18
39%
61%
Non Government
Government
SADAD Payment System
SADAD shifted consumer behavior from physical channels (branches) to electronic channels
19
SADAD Market Share TrendsSADAD Channels Usage Trends
2003 20101%
35%
7%
18%
19%
41%
73%
6%
Website Telephone Banking ATM Branch 2007 2010
21%
91%
79%
9%
Other Channels
SADAD
SADAD Payment System
Awards and certificates
20
UN Public Service Award GCC e-Government Award
ISO Information Security Mgmt
Injaz e-Government Achievement Award
ISO Quality Mgmt
SADAD Payment System
Thank You