New technologies have recently taken the market by storm, with organizations realizing that it’s a simple matter of sinking or swimming. The decentralized economy was one of those fields where innovation and adoption going hand-in-hand.
Just recently, the rising popularity of the fintech industry was put on display when traditional money transferring firm Western Union acquired a 15 percent stake in Saudi Arabian STC Group. The buy-out was calculated to be around $200 million with WU planning to use fintech to expand globally.
The involvement of traditional organizations in the fintech world was the first step in creating awareness among large banked populations. For holders of large accounts who are usually older and lack the knowledge in fintech, the Western Union acquisition opens doors to new avenues. According to STC Group chairman Mohammed bin Khalid Abdullah Al Faisal, the country aims to fulfill its destiny as a digital enabler.
STC further claimed that its fintech wing-stc pay- was the first licensed fintech company by the Saudi Arabian Monetary Authority. With more than 4.5 million users, WU will be receiving a large chunk of people dealing with the new technology. The creation of awareness will be the most important step in onboarding new users into the field.
Post the acquisition, STC pay was valued at $1.3 billion, making it the first Saudi Arabian fintech unicorn. Coincidentally, the first fintech unicorn is also the country’s first unicorn in the private industry space.
The acquisition process was started by STC back in October when the company wanted investors to look into its technology. Officials from the Saudi government added that the main intention of the deal was to reduce people’s dependency on cash while modernizing the economy of the country at the same time.
Countries like Saudi Arabia are on the verge of creating new opportunities because of the rapid changes brought in by the coronavirus. If STC pay can live up to its name in the middle east, then analysts expect a large fintech boom in the region soon.