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Visa makes first Mena open banking investment

Visa open banking Reuters
The total investment in the UK’s fintech sector declined to $5.1 billion in 2023, down 65 percent from the previous year
  • Tarabut Gateway fundraising to expand in Saudi Arabia
  • Plans to grow open banking platform across the Mena region
  • Visa investment in Tarabut enhances innovative financial services

Payments giant Visa has made its first investment into open banking in the Middle East and North Africa as the region seeks to develop its fintech sector.

Open banking allows customers to share their financial data securely with a third-party provider to take advantage of new services and products.

Tarabut Gateway, an open banking platform, announced on Wednesday the completion of a $32 million Series A fundraise, led by Pinnacle Capital and including Visa, Aljazira Capital, Tiger Global and other existing investors.

The proceeds raised will bolster Tarabut’s footprint in the Saudi market, with a focus on attracting top talent and fostering partnerships within the kingdom. 

Andrew Torre, regional president of Visa Cemea, said: “Next-generation digital experiences and innovation are driving the future of financial services, and open banking is a growing movement that can help consumers better access and manage finances. 

“We look forward to partnering with Tarabut Gateway, combining our global payments network and proven local solutions with their open banking platform to allow innovative financial services across the region.”

Abdulla Almoayed, founder and CEO of Tarabut, said: “Open banking is reshaping the financial landscape in Saudi Arabia and the wider Middle East… this fundraise will help us execute our strategy and contribute to realising Vision 2030.”

Open banking has been live in Bahrain since 2019 and in Saudi Arabia since November 2022, and is set to go live in the UAE this year.

Open banking regimes have already been established in parts of the world including EU countries, the UK, Australia and Hong Kong.

Tarabut was the first ‘graduate’ from Bahrain’s sandbox programme and is licensed by the Central Bank of Bahrain. It also holds a licence by Dubai Financial Services Authority to provide money services in and from Dubai International Financial Centre. 

It has further plans to expand into other countries across the Mena region.

In Saudi Arabia, the company said it has achieved over 60 percent market coverage through partnerships with leading banks such as Alinma Bank, Arab National Bank, Saudi National Bank and Riyad Bank. 

The Saudi Central Bank (Sama) has also included Tarabut as one of the first participants in its regulatory sandbox, which is a key component of the open banking framework rollout.

An Open Banking Lab in Saudi Arabia was launched in January. Experts say it will take the fintech sector to a new level in the kingdom.

“The emergence of fintech presents growth opportunities for the government, investors and entrepreneurs in Saudi Arabia. The sector has started acting as a catalyst for increasing the contribution to the GDP and increasing job opportunities,” said Barkha Doshi, who specialises in technology-driven innovation in financial services in the Middle East for Pinsent Masons.

In the same way that the UK and Singapore have positioned themselves in Europe and Asia respectively, Saudi Arabia is seeking to become the gateway for fintech activity in the Middle East.

The kingdom aims to host more than 500 fintechs by 2030 and offer 18,000 related jobs, with the sector contributing $3.5 billion to the economy.

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