Western Union Buys 15 Pct Stake In Saudi Digital Payments Co

Western Union Co. has entered into a deal to buy up to 15 percent of Saudi Digital Payments Co., also called stc pay, for up to $200 million, the Denver-based buyer announced today.

Saudi Digital Payments — stc — is a wholly owned subsidiary of Saudi Telecom Co.

Western Union stated in today’s release that with the purchase, the companies have “extended the terms of their commercial relationship.”

Stc has 4 million customers and “an established regional brand in a fast-growing digital wallet market,” today’s release states. As for its own digital business, Western Union added that in the third quarter of 2020, digital revenue increased 45 percent year over year and represented 321 percent of the company’s consumer-based revenue.

Under the two companies’ existing relationship, according to Western Union, stc users are able to execute transactions through Western Union’s network.

“I am extremely pleased with the progress of Western Union’s digital growth strategy this year. A key element of this strategy is partnering with innovative financial companies to expand services for their customers and drive incremental growth for Western Union,” Western Union Chief Executive Hikmet Ersek said in a prepared statement.

Jean Claude Farah, president of Global Network at Western Union, added in today’s news release regarding stc, “We believe the company is well-positioned for continued growth and expansion into new digital payment services in the Gulf region.”

Nasser Alnasser, stc group chief executive, added, “As a digital enabler and a pioneer in the digital transformation, we aspire to play a vital role in the vision of the Saudi Arabian Monetary Authority (SAMA) in many initiatives that support creativity and developing financial services, as FinTech is a pillar of stc strategy.”

Western Union said the transaction is expected to close in the first quarter of calendar 2021.

Western Union’s move comes as Saudi Arabian authorities take steps to increase the kingdom’s use of electronic payment systems instead of cash.

Digital payments in Saudi Arabia are run by a state-owned company called Saudi Payments that already has entered into arrangements with companies including stc.