Saudi Arabia’s Fintech Growth: Connect Money Expands to the Kingdom
Introduction
In recent years, Saudi Arabia has emerged as a hub for fintech innovation, with many companies exploring opportunities in the sector. One such company is Egypt-based Connect Money, which has announced plans to expand its services to the Kingdom. Founded by Ayman Essawy, Marwan Kenawy, and Momtaz Moussa, Connect Money provides a white-label card issuing platform that allows businesses to offer debit and credit cards to their customers without building fintech infrastructure or securing regulatory licenses.
Entering the Saudi Market
Connect Money is set to enter the Saudi market by mid-year 2025, with plans to expand to Morocco soon after. According to Essawy, the company sees a significant opportunity for growth in Saudi Arabia, particularly in the fintech sector.
"We see a very big opportunity toward expansion, especially in Saudi Arabia and Morocco," Essawy said in an interview with Arab News. "Saudi Arabia is one of the hot topics in the region, and fintech is growing significantly."
Building Relationships with Regulators and Financial Providers
Connect Money has already established strong connections with the Saudi ecosystem, including regulators and leading financial providers. The company has built a good relationship with partner banks, which will aid in its expansion plans.
"We have spent the last 10 years operating on the business-to-business side in our past ventures," Essawy explained. "We claim to have very good market understanding across different sectors."
Solving Critical Problems for Enterprises
Connect Money solves three critical problems for large enterprises planning to incorporate strong fintech solutions internally:
- Very long compliance and regulatory cycles: These cycles occur because companies do not have the capability to build an infrastructure since they already operate a core business.
- High cost of building the infrastructure: Building and operating this part of the business can be expensive, and it takes a long time to get granted a license.
- Lack of value-added services: These entities usually look for reasons to turn cash users into cashless, which is a service that Connect Money provides.
Creating a One-Stop Shop for Embedded Finance
Connect Money’s solution is to provide a one-stop shop for embedded finance, where businesses can offer debit and credit cards to their customers without building fintech infrastructure or securing regulatory licenses. This includes getting the right approvals from regulators, issuing white-label cards, and providing a full managed service.
"This shop comes from getting the right approvals from regulators, issuing white-label cards, and providing a full managed service on top of that," Essawy explained. "As if I’m creating your small bank for your company."
Traction in Egypt and Plans for Saudi Arabia
Connect Money has already seen significant traction in Egypt, landing eight contracts in under a year of operation. The company has a 10-week go-to-market plan to onboard clients.
In Saudi Arabia, Connect Money expects to focus on mid-sized businesses that require its services. Essawy believes that there is still a big gap between cash and cashless transactions, which the company aims to bridge.
Market Dynamics in Saudi Arabia
Saudi Arabia holds a different market segmentation compared to Egypt, according to Essawy. The founder also emphasized that there is a misconception that the nation only consists of high-value customers.
"There is a lot to be tackled in the mid layers with the hyper growth that is taking place in the Kingdom," Essawy added.
Expanding to Saudi Arabia: A Cautionary Note
Essawy shares his view on the growing number of Egyptian companies expanding to Saudi Arabia, saying:
"I’ve seen many companies expand to Saudi Arabia as a first choice and I don’t think this is a wise decision."
He believes that each business model is dependent on what’s the end goal and where you can scale. In Saudi Arabia, you’ll find business but also an expensive working environment.
Conclusion
Connect Money’s expansion to Saudi Arabia marks an exciting development in the fintech sector of the Kingdom. With its white-label card issuing platform and one-stop shop for embedded finance, the company is poised to make a significant impact in the market.
As Connect Money continues to grow and expand its services, it will be interesting to see how the company navigates the challenges and opportunities that come with entering a new market.
Sources:
- Arab News
- Connect Money website
