Saudi Arabia has become one of the world's fastest growing fintech markets. But the bigger test may be what happens after a fintech finds its first successful product. Tabby has just raised $233 million at a $6.5 billion valuation as it expands beyond buy now pay later into a much broader range of financial services. That kind of expansion puts enormous pressure on the infrastructure underneath — credit cards, data, fraud controls, and local payment rails all have to scale together. Joining me is Peter Theunis, Principal Advisor at Paymentology. Peter, it is great to have you with us.
Thank you for inviting me. Good to be here.
One year after Paymentology established its commercial presence in Saudi Arabia, what is materially different about your Saudi business today compared to the same time last year?
By introducing ourselves into this market and going through all the steps needed for localisation, we see that much more opportunity arises. People take us more seriously. There is much more opportunity here. This market is growing fast. But there are limitations to what you can do — you need to be compliant with local regulations and the way of working. Once you put those processes and infrastructure in order, you can better serve the players here. And that ends up making them more interested in what you are doing.
Paymentology has named Tabby as one of its Saudi clients. When a fintech makes that kind of jump from one product to several, what is the first part of its payment infrastructure that usually comes under pressure?
When companies like Tabby grow that fast, the first thing you need to check is whether your systems are resilient. Can you cope with the volumes they are projecting to do? If not, they need to look for another supplier — because risk is not what you want. You are playing with the money of the citizens of the kingdom. Your system needs to be available 24/7 at 99.99% of the time. Second, we call ourselves a platform to grow — but as a platform you also need to make sure you are not jumping in every new direction. We are mainly focused on the card rails today. That is our bread and butter. If we were opportunistic and tried everything, that would not be in the best interest of our customers — you end up with a product that is not ready. It is important to agree with your customer: this is what we do, this is where we are good, and for other things you may need other suppliers. Focus on what you do best.
Is the harder challenge handling additional transaction volume, or managing several very different products, risk rules, and customer journeys on the same platform?
With technologies like cloud, we can grow transaction volume relatively easily — that scales. The important piece is communication with your customers. Clients do not scale up overnight. Their plans are based on business cases, so you need to talk to them quarterly at minimum to understand their plans, and then scale up accordingly. They also expand their product range — starting with debit, then moving to credit, which we can also enable. And of course there are more value-added services like fraud that need to be there, because the more volume, the more potential for fraud. As a supplier, you need to make sure you are giving clients the right tools to manage that.
Saudi Arabia already has roughly 57 million cards and more than 1.2 trillion riyals in annual card spending. Does this market need more cards or better reasons to use one card as primary?
It is not about the number of cards anymore. With tokenisation and the digital layers, and now with AI coming in, it is not about a physical plastic card — it is about a token. The token is still based on what was previously the card number. What we see globally is that more tokens are being issued. Before, you had one card and all transactions went through it. Now people generate tokens — for example, a one-time token for a single international travel transaction. You see more and more use cases where tokens are generated, also to avoid risk. That gives a totally different way of looking at the market. The infrastructure always starts with the basics. We are now seeing more embedded finance use cases emerging in the kingdom, and over the years we will see the use of tokens increase alongside those.
What kind of conversation or announcement would convince you that Saudi fintech has moved into its next stage for real?
I would be convinced when I see a fintech that has proven its core product with profitability — not just growth — and is now building financial platforms that can scale. Not just launching more companies, but building something that is capable of scaling profitably. That is the signal I am looking for.
Thank you Peter. It is great to have you with us.
Thank you for having me.
