SADAD Payment System
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SADAD Payment System (SADAD) was established by the Saudi Arabian Monetary Agency (SAMA) to be the national Electronic Bill Presentment and Payment (EBPP) service provider for the Kingdom of Saudi Arabia (KSA). The core mandate for SADAD is to facilitate and streamline bill payment transactions of end consumers through all channels of the Kingdom’s Banks. SADAD was launched on October 3, 2004.
SADAD links the commercial sector and local banks, offering the ability to collect customer payments electronically through all the banking channels in the kingdom 24 hours a day.
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[edit] History & Background
SAMA mandated that all banks must accept bill payments at their branches from anyone. The payer does not have to be a customer of the bank. Pre-SADAD economics of bill payment placed an unduly large burden on banks; it was inefficient and slow. Banks recovered a small portion of the cost through keeping the collected money for varying periods of 7-30 days after the bill was paid.
Approximately 60-70% of bills are currently paid in cash at bank branches. Due to the high number of bills generated in the Kingdom, this results in high costs for banks in front office, payment processing, IT integration and reconciliation. In addition, consumers queue for a long time at banks’ front office desks before paying their bills. Bill presentment and collection is largely manual and paper-based creating significant inefficiencies and overheads for billers and banks.
Large billers formed bilateral agreements with banks in order to enhance bill payments collection. This enabled consumers to use their bank channels to view and pay bills (without any bill consolidation). It required every biller to connect to the 12 different banks operating in KSA and from banks to connect separately to every biller they are under contract with.
SAMA chose to integrate these connections through SADAD, which is a single platform that links different billers and banks to enable the consumers to use the electronic channels of any bank. SADAD is now facilitating the payment of high-volume periodic bills (such as utility bills and phone bills) and customer initiated payments, such as traffic fines.
[edit] How Sadad Works
- Billers send summary bills information to SADAD at a pre-determined schedule
- SADAD validates data received and uploads it into its database
- SADAD notifies Billers of any discrepancies
- Customer requests bill(s) information through Bank channels(1)
- The Bank forwards the request received to SADAD
- SADAD retrieves bill information from its database and forwards it to customer
- Customer selects the bill(s) to be paid and the respective amount(s)
- The Bank debits the customer account and confirms the transaction
- SADAD updates its database based on the Bank’s confirmation(2)
- SADAD notifies relevant Biller(s) accordingly
- At the end of the day, SADAD initiates settlement instructions through SARIE
- At the end of the day, Billers receive reconciliation reports from SADAD showing a breakdown of all transactions processed by SADAD
- SADAD updates bills status to “settled”
[edit] SADAD Vision
- SAMA’s initiative aim to establish an electronic platform to streamline the bill payment process in the Kingdom
- The electronic platform will act as an intermediary between billers and banks
- The intermediary will be the core to a trusted payment brand in the Kingdom
- A trusted payment process will use leading edge technology to provide efficient and effective customer service to the people of the Kingdom
- Leading edge technology will provide cost effective bill payment wherever and whenever the customer desires
