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Saudi arabian flag in Asir province, Abha, Saudi Arabia.
Eric Lafforgue/Art in All of Us | Corbis News | Getty Images
Saudi Arabia’s STC Pay plans to expand its financial services offering across the Gulf region, after achieving a billion-dollar “unicorn” valuation on the back of a deal with Western Union.
“We are very proud of becoming the first unicorn in the Kingdom and the first fintech unicorn in the Middle East,” STC Pay CEO Ahmed Alenazi told CNBC in an exclusive interview on Monday.
STC Pay reached the valuation last week after Western Union, the world’s largest money transfer firm, acquired a 15 percent stake for $200 million – giving the burgeoning payments business a value of around $1.3 billion. STC Pay is the digital payment arm of Saudi Arabia’s STC Group, the largest telco operator in the Kingdom.
“The business opportunity is bigger than money transfers,” Alenazi said. STC Pay says it has more than 4 million active users after successfully tapping into rising smartphone and internet penetration across Saudi Arabia, where 70 percent of the population is under the age of 30 and the government is reducing dependence on cash as a way to modernize the economy.
Western Union, which has long seen the Gulf as a lucrative market for remittances, provides money transfer services that allow STC Pay users to send money from its app to more than 200 countries around the world.
STC Pay is now in talks with Gulf regulators to seek approval to operate in the United Arab Emirates, Kuwait and Bahrain, subject to regulatory approvals. It said other countries were also under consideration.
“This is where we want to change the way people look at financial services,” Alenazi said.
STC Pay seeks banking license
STC Pay was the first fintech company licensed by the Saudi Arabian Monetary Authority. It’s now negotiating with Saudi regulators to obtain a digital banking license.
“This will allow us to do lending and other activities,” Alenazi said. “We have a lot to do in terms of products and services,” he added, indicating that a banking license would allow the business to expand into more valuable business areas.
“We don’t want to tap in with similar products and services available in the market, we want to tap in with a unique user experience,” he said. ”We will work with the central bank to get it done ASAP.”