PYMNTS GCC: Omani FinTech Hub shows potential

Often referred to as rentier states because of their dependence on oil revenues, the Gulf Cooperation Council (GCC) countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – have all set up economic transformation agendas to diversify. their economies and reduce their dependence on fossil fuel revenues.

Formalized at various levels in the GCC, the Transformation Agendas, or “National Visions”, underline overall digital transformation and technological progress as the cornerstones of the Gulf’s transition to a post-oil economy.

While Bahrain, Saudi Arabia, the UAE and Qatar have put together their medium-term economic development goals around 2030 targets (Vision 2030), Kuwait has chosen Vision 2035. And Oman, which we analyze in this fourth part of PYMNTS ‘GCC FinTech Series, has set 2040 as the target date for achieving its development goals, including those related to the digital transformation.

See Part 1: PYMNTS GCC Series: High Smartphone Penetration, Government Support Increases UAE FinTech Growth

See Part 2: PYMNTS GCC Series: Bahrain Drives Open Banking Adoption in MENA

See Part 3: PYMNTS GCC Series: Partnerships, PayTech Innovation Move Kuwait Into Digital Era

Adds FinTech Foundation

As much as the global technology community often talks about a leapfrog, when it comes to financial technology, there are certain basic things that need to be put down before world-leading innovation can take root in any economy.

On the technical side, it includes the basics of modern payment rails, access to cloud services and the key components of a FinTech ecosystem such as digital wallets and e-money services.

And on the legal side, a flexible licensing regime, a regulatory sandbox and an open banking framework are among the key factors that contribute to the overall health of a country’s FinTech environment.

When it comes to Oman, the country’s nascent FinTech scene has enormous untapped potential given its young, tech-savvy population and growing digital economy.

For example, the government-backed Oman Daily Observer recently reported that the Central Bank of Oman (CBO) is working on an open banking initiative, an indication that the country is working to strengthen its FinTech ecosystem and modernize the banking industry.

Prior to 2017, the CBO launched a mobile payment system to enable simultaneous transfers via a mobile phone number. Later in May 2020, the central bank issued its first license to a non-bank financial entity, FinTech start-up Thawani Technologies, and took further steps towards driving FinTech growth and innovation.

Today, Thawani offers ePayment solutions through a mobile wallet and a payment gateway, which enables customers to easily pay bills, tuition and social insurance as well as top up credit.

For consumers, the Thawani app follows the typical mobile wallet model with QR payments and peer-to-peer transactions. It also includes innovative features such as a virtual card solution and a “see nearby sellers” tab.

Drives FinTech growth

Although people like Thawani build the tools Oman’s consumers need for the economy to fully embrace digital payments, as in most countries in the Middle East and North Africa (MENA), cash is still widespread in the country.

To encourage the use of electronic payments, the government has made it mandatory for some local trading companies, starting this year, to make ePayment options available to customers.

Omani also have several options when it comes to cross-border transfers, especially for the large foreign Indian community – they represent 20% of Oman’s total population of 2.3 million, according to 2010 national census data – in the country.

One of these is a payment corridor between Oman’s second largest bank, Bank Dhofar, and the Indian Indusind Bank, which uses RippleNet technology to simplify real-time mobile transfers.

Related: The Arab Monetary Fund offers alternatives to CBDC, including FinTech Wise, SWIFT, Revolut and RippleNet

Overall, Oman’s FinTech ecosystem shows enormous growth potential in terms of launching various incubators, a regulatory sandbox for FinTechs, a startup hub and a million-dollar technology fund, but more will need to be done to bring it to the level of FinTech ecosystems. in neighboring GCC countries.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA newsletter.