SADAD

The SADAD payment system was established by the Saudi Central Bank (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 KSA (Kingdom of Saudi Arabia) Banks. SADAD was launched on June 7, 2007.

SADAD links the commercial sector and local banks, offering the ability to collect customer payments electronically through all the banking channels in the KSA (Kingdom of Saudi Arabia) 24 hours a day.

History and background
SAMA mandated that all banks accept bill payments from anyone at their branches. The payer does not have to be a customer of the bank. Pre-SADAD economics of bill payment placed an unduly significant burden on banks; it needed to be more efficient and faster. Banks recovered a small portion of the cost by keeping the collected money for 7–30 days after the bill was paid.

Approximately 60-70% of bills were paid in cash at bank branches. The high number of invoices generated in the Kingdom increases bank costs in the 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 are primarily manual and paper-based, creating significant inefficiencies and overheads for billers and banks.

Large billers formed bilateral agreements with banks to enhance bill payment 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 twelve banks operating in KSA and from banks to connect separately to every biller under contract.

SAMA chose to integrate these connections through SADAD, a single platform that links different billers and banks to enable consumers to use the electronic channels of any bank. SADAD is now facilitating the payment of high-volume periodic bills (such as utility and phone bills) and customer-initiated payments, such as traffic fines.

How SADAD works

 * 1) Billers send summary bills information to SADAD at a pre-determined schedule
 * 2) SADAD validates data received and uploads it into its database
 * 3) SADAD notifies billers of any discrepancies
 * 4) Customer requests bill information through bank channels
 * 5) The bank forwards the request received to SADAD
 * 6) SADAD retrieves bill information from its database and forwards it to the bank channel
 * 7) Customer selects the bills to be paid and the respective amounts
 * 8) The bank debits the customer account and confirms the transaction
 * 9) SADAD updates its database based on the bank’s confirmation
 * 10) SADAD notifies relevant billers accordingly
 * 11) At the end of the day, billers receive reconciliation reports from SADAD showing a breakdown of all transactions processed by SADAD
 * 12) At the end of the day, SADAD initiates settlement instructions through SARIE
 * 13) SADAD updates bills status to 'settled'