The Saudi Arabian Monetary Authority (SAMA), the central bank of the country, is set to establish a national payments company.

The move, approved by the union cabinet, aligns with SAMA’s plan to reduce the kingdom’s dependence on cash-based transactions.

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The establishment of an independent entity to manage the payment sector is also expected to support financial inclusion.

In a statement, SAMA governor Ahmed bin Abdulkarim al-Kholifey said: “The establishment of the payment company is in accordance with international best practices, which usually entrust the preparation and operation of payment infrastructure services to national companies.”

The payment company will provide common infrastructure to payment companies to facilitate competitiveness.

Additionally, it will provide necessary technical and operational support to the payment companies.

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The formation of the national payments company is aligned with the Financial Sector Development Program, part of Saudi Arabia’s Vision 2030 plan.

SAMA noted that the payments sector in the country has undergone significant changes in the last 30 years.

This year, the central bank introduced real-time payments in the kingdom, in partnership with Mastercard company Vocalink.

Subsequently, Vocalink tapped ACI Worldwide to accelerate the adoption of real-time payments in Saudi Arabia.

In May this year, Saudi Arabia British Bank (SABB) and India’s IndusInd Bank launched a Ripple- powered remittance corridor between the two countries.