SINGAPORE: World oil demand will peak at 104.4 million barrels per day (bpd) in the mid-2030s, up from just below 100 million bpd currently, as new technologies gradually eat into oil use, China’s Unipec said on Monday.
Improved energy efficiency and technological changes, including the rise of renewables, meant global oil demand growth would slow in coming years before peaking in 2035, Unipec President Chen Bo told the annual Asia Pacific Petroleum Conference (APPEC).
This in turn will slow growth in global oil refining capacity, which is set to hit 5.6 billion tons per year in 2035, he said.
“We believe 2018-2035 will be the last cycle of global refining capacity expansion. After 2035, it is difficult to see large-scale refining projects in construction, except for some small upgrade projects and petrochemical projects,” said Chen.
Unipec is the trading arm of Asia’s largest refiner Sinopec.
The switch to cleaner fuels will also boost global demand for liquefied natural gas (LNG), particularly in the Asia Pacific, after 2025, he added.
An escalating trade war between China, the largest energy importer, and the United States has dampened the Asian nation’s demand for US crude oil and LNG.
The United States exported 300,000 barrels per day (bpd) of crude oil to China in the first half of 2018, and 56 cargoes of LNG through July, or roughly 10 percent of its total LNG exports, according to official data.
Despite the trade dispute, Chen said US crude supply was an important new source for Chinese refiners as it allowed diversification from Middle East and African crudes.
Trade war tensions between the two countries would last “for the time being, and in the future we’ll be active in this area,” he added.
Beijing has excluded US crude imports from its tariffs list so far, but most Chinese buyers are staying away from US oil as the trade war shows no signs of cooling.
Unipec resumed loading US crude in September after a two-month hiatus.
China is also under pressure from the US to reduce its Iranian oil imports as Washington aims to cut exports from OPEC’s third-largest exporter to zero to force Tehran to negotiate a nuclear treaty.
Buyers in Europe, Japan, South Korea and India have either stopped or are reducing Iranian oil imports sharply ahead of the introduction of sanctions in November.
“I expect we’ll cut a little but the volume has not been finalized,” Chen said, without giving a timeframe for the cuts.
He added that Unipec has resumed normal loadings of Saudi oil after it cut imports in May-July.
Given the current supply and demand dynamic in global markets, Chen said, crude oil prices between at $60 and $80 per barrel were normal.
World oil demand, refining growth to peak in 2035 — Unipec
World oil demand, refining growth to peak in 2035 — Unipec
- Improved energy efficiency and technological changes, including the rise of renewables, meant global oil demand growth would slow in coming years before peaking in 2035
- The switch to cleaner fuels will boost global demand for liquefied natural gas
Edtech in Saudi Arabia: revolutionizing education through innovation
RIYADH: Edtech, short for educational technology, refers to the use of technology—hardware, software, and digital resources—to enhance teaching, learning, and educational outcomes.
It encompasses a wide range of tools and techniques aimed at improving the educational experience, including online learning platforms, educational apps, digital textbooks, virtual reality simulations, gamified learning experiences, and more.
Edtech is utilized in schools, universities, corporate training settings, and lifelong learning environments to make education more engaging, accessible, and effective.
When it comes to Saudi Arabia specifically, investing in edtech aligns with the Kingdom’s Vision of establishing a knowledge-based economy.
Edtech also plays a critical role in Saudi Arabia's Vision 2030. Investing in education technology today is like planting a seed that will blossom into a flourishing ecosystem by the time the FIFA World Cup arrives in 2034.
Allocating resources to edtech now is akin to sowing the seeds for a plentiful harvest of knowledge and innovation that will enrich the educational landscape in the Kingdom by the time FIFA World Cup unfolds in 2034.
The edtech market size in Saudi Arabia is projected to exhibit a growth rate of 13.3 percent during 2024-2032, according to global management consulting firm imarc.
This comes as the market is being propelled by a surge in demand for tailored education to meet individual student needs, a heightened emphasis on digital literacy and tech competencies, and a growing recognition of the value of adaptable and convenient learning options.
Saudi efforts
There is no doubt that the Saudi Ministry of Education isn’t just talking about the future—they’re building it, step by step, with initiatives designed to transform their classrooms into cutting-edge hubs of AI and digital mastery.
“Take their ‘Future Intelligence Program,’ for example, which aims to empower 30,000 students with skills in AI, machine learning, and smart technologies. Imagine a generation of Saudi youth who can program self-driving cars before they even graduate high school,” Ian Khan, a technology futurist and author who writes on the subject of AI, told Arab News.
“This is more than just an upgrade in skills—this is about shaping a workforce ready to dominate the tech economy. Layer on top of that the SAMAI initiative, where 1 million Saudis will gain expertise in AI and digital tools, and it becomes clear that Saudi Arabia isn’t just keeping up with global tech trends—they're aiming to lead them,” Khan added.
He went on to note that this bold vision is intricately aligned with Saudi Vision 2030, which strives to create a knowledge-driven economy.
“This AI-driven, personalized learning experience is where the future of education meets the individual’s unique strengths and needs, gearing up the country for its next leap forward,” Khan concluded in that regard.
Initiatives
There is no doubt that the Kingdom is actively integrating AI into its education system to create a future-ready workforce.
“Programs such as the Future Intelligence Programmer aim to train thousands of students in AI, equipping them with the skills to innovate in a rapidly digital world. AI is being used to personalize learning experiences, automate administrative tasks for educators, and enable more tailored educational pathways,” Samer Bohsali, Middle East head of government & public sector practice, Bain & Co., told Arab News.
“These efforts are part of a broader vision to transform the Kingdom’s education system, setting new standards for digital literacy and student engagement,” Bohsali said.
On behalf of PwC Middle East, Partner at Education and Skills Ayham Fayyoumi told Arab News that the Kingdom is adopting a cautious yet forward-thinking approach to AI in education, with initiatives focusing on several key areas.
“One notable example is the implementation of adaptive learning systems, which use AI to analyze individual student performance and tailor educational content accordingly. These systems can identify students’ strengths and weaknesses, offering personalized learning experiences that enhance educational outcomes,” Fayyoumi said.
“Additionally, AI-powered virtual assistants are being introduced to support both teachers and students in managing routine tasks, such as administrative work or grading, allowing educators to dedicate more time to core instructional activities. These AI tools are designed to streamline workflows, enhance productivity, and improve engagement in the classroom,” he added.
Global partnerships
Global EdTech partnerships are crucial for the Kingdom for several reasons including access to innovation, enhanced learning opportunities, cross-cultural exchange, among several others.
“When Saudi Arabia decided to revolutionize its educational landscape, they didn’t go it alone—they teamed up with global powerhouses like Google, Microsoft, and Coursera. This collaboration isn't just window dressing. It’s a deliberate strategy to equip students and educators with the latest tools in AI, cloud computing, and data science,” Khan said.
“Google Cloud’s Elevate Program, for example, has trained over 25,000 Saudi women in cloud technologies. This is more than just a skillset boost—this is building a tech-savvy workforce that can compete on a global stage,” he added.
The technology futurist continued to highlight that these partnerships give Saudi educators access to AI-powered platforms that personalize learning and streamline assessments, ultimately creating more engaging and efficient classrooms.
“The future of education isn’t just digital—it’s adaptable, global, and responsive. And Saudi Arabia, through these forward-thinking collaborations, is leading the charge toward a tech-dominant educational future,” Khan said.
Saudi Arabia’s collaboration with global tech leaders also empowers the nation to adopt advanced educational tools that inspire innovation in the classroom.
From Bain & Co.’s side, Bohsali explained that these partnerships provide access to AI-driven platforms that foster personalized learning and critical thinking.
“This digital transformation is not just about adopting technology but also about reshaping how education is delivered, making learning more engaging and aligned with the future needs of the global economy ,” he said.
Saudi Arabia’s educational technology firms are using AI and technological advancements to revolutionize conventional educational approaches and enhance student achievements. Taking cues from effective programs in the UK and elsewhere, Saudi Arabia is directing significant resources into AI-infused tools across various sectors, particularly education.
Consequently, this initiative is fostering expansion in the education sector and sparking creativity within private enterprises, which is positively impacting more than 6 million students in the nation.
In that regard, PwC partner Fayyoumi said: “Several EdTech companies are at the forefront of this revolution, incorporating advanced AI technologies into their products and services to enhance learning experiences.”
“These companies are providing products utilizing AI to offer personalized learning pathways, adaptive assessments, and real-time feedback to better meet the unique needs of individual students. Such tools not only improve engagement but also boost academic performance by catering to diverse learning styles,” he added.
Saudi Vision 2030
“Saudi Vision 2030 isn’t just about a shift in economic strategy—it’s a transformation in mindset. At the heart of this vision is the move from a resource-based economy to one driven by knowledge, innovation, and technology,” Khan said.
“By embedding AI and digital learning in classrooms, programs like SAMAI and the Future Intelligence Program are crafting a new generation of thinkers, doers, and creators. The ripple effects will be profound. Think about it—students will be more engaged because their learning is tailored to their strengths,” he added.
The technology futurist emphasized that the education system will be more efficient, and graduates will emerge prepared for high-demand sectors like AI, cybersecurity, and digital industries.
He underlined that this is the essence of future readiness—where a nation’s educational foundation aligns perfectly with the demands of tomorrow’s economy.
On Bain & Co.’s behalf, Bohsali said: “By embedding AI and advanced technologies into the curriculum, the Kingdom is fostering a generation of learners who are not only technologically adept but also equipped to lead in innovation.”
“The expected outcomes are profound—enhanced digital literacy, improved educational outcomes, and the positioning of Saudi Arabia as a global leader in the knowledge economy,” Bohsali added.
Education is a key pillar, for both youth and above in achieving the goals of Vision 2030. This comes as the median age of Saudis is 22 years, and 63 percent of the Saudi population is below the age of 30.
Furthermore, PwC’s 2024 Hopes & Fears survey shows that nearly three-quarters of people surveyed in Saudi foresee the growing importance of digital skills in their roles over the coming five years.
“Incorporating digital tools within the education ecosystem can help boost the overall student learning experience and prepare them for their future work environments,” Fayyoumi said.
The PwC partner concluded by emphasizing that by enhancing the education sector using digital technologies such as AI, Saudi Arabia stands to build a globally competitive society, and to become the hub for the next generation of digitally equipped leaders in the Kingdom.
“Thus, the digital transformation of the education sector is another important part of Vision 2030’s success, to ensure young people in the Kingdom have the right skills for the future world of work,” he said.
Saudi Arabia’s oil legacy fuels shift to renewable energy hub
RIYADH: Saudi Arabia’s established prowess in crude oil production could help the Kingdom emerge as a global leader in the renewable energy sector, experts suggest.
Paul Sullivan, an energy and environment expert at Johns Hopkins University, emphasized that Saudi Arabia possesses the technical and engineering skills necessary to become a central hub for renewable energy.
Speaking with Arab News, he explained that the Kingdom’s vast experience in energy production could be leveraged to accelerate its transition toward cleaner energy sources.
Bolstering renewable energy capacity is critical for Saudi Arabia as it aims to generate 130 gigawatts of clean energy by 2030 and achieve net-zero emissions by 2060.
At the center of this ambitious plan is NEOM, a flagship project through which Saudi Arabia intends to become a leading manufacturer and exporter of green hydrogen. NEOM, in partnership with ACWA Power and Air Products, aims to export up to 600 tonnes of hydrogen per day by 2026.
“Saudi Arabia has many technical, business, and engineering skills that can spill over from oil and gas to renewables. One obvious one is drilling. Advanced drilling techniques can be used to develop geothermal energy in many places in the Kingdom,” said Sullivan.
He further noted: “Saudi Arabia has massive potential for geothermal energy. Skills in developing pipelines, refineries, ports, pumping stations, and more could also be transferred to geothermal.”
Sullivan also pointed out that expertise in electrical engineering and the construction industry, honed through Saudi Arabia’s legacy oil business, can be used to build new energy systems, including wind, solar, geothermal, and nuclear power.
“Saudi Arabia has a lot of financial clout from its oil business that could be redirected, but properly, to green energy and other environmental industries such as advanced desalination,” he added.
Technical and commercial expertise
Peter Brishimov, a partner in Energy and Process Industries at Kearney Middle East and Africa, echoed similar sentiments, emphasizing that Saudi Arabia’s experience in crude oil production provides a solid foundation for future renewable energy projects.
“In terms of technology, it is leveraging its track record in effectively deploying large-scale capital projects. On the commercialization front, given that the market for renewable energy is not yet as global as the one for oil, the Kingdom is building the bridge to make renewable energy commercially viable in both the short term and long term,” Brishimov explained.
He noted that Saudi Arabia is also focused on expanding its interconnection infrastructure and advancing green hydrogen production, which would enable the Kingdom to meet its own renewable energy needs while positioning itself as a global player.
Sullivan suggested that Saudi Arabia could quickly transform its traditional energy infrastructure into facilities capable of producing green energy.
“All over the world, traditional energy systems are being transformed into green energy hubs. The knowledge is out there. Saudi Arabia can build on that with its excellent energy research institutes, universities, and think tanks. KAPSARC comes to mind,” he said.
In August, a collaboration between KAUST, NEOM’s Education, Research, and Innovation Foundation, and ENOWA was announced to accelerate the development of Saudi Arabia’s hydrogen economy. As part of the agreement, ERIF will sponsor three strategic projects focused on hydrogen research, working in partnership with KAUST researchers to advance the development of hydrogen as a renewable energy source.
Human capital development
Sullivan also emphasized the importance of retraining the Kingdom's workforce to support the green energy transition.
“The traditional energy workforce will need retraining for the skills that are not transferable. Some people may not move that easily to newer ways of doing things, and some may be left behind. Younger people should be educated in the new opportunities. The training and education systems for traditional energy can be developed alongside the same for the new systems,” he said.
Brishimov highlighted that human capital development is crucial for the energy transition, often overshadowed by factors such as natural resources and capital availability.
“Based on its track record in building an oil industry, the Kingdom is in a strong position to do the same in the renewable energy domain. Through its national policies for enabling human capital development and Saudization requirements, Saudi Arabia is positioning itself to successfully transition its workforce,” he added.
Potential challenges
Discussing potential obstacles, Sullivan pointed out that some critical minerals and metals required for green energy production, particularly in electric vehicles, will need to be imported. However, he noted that Saudi Arabia is making strides in developing its mining sector, which could mitigate this issue in the future.
“The fact that it is so inexpensive to get the oil out of the ground can hamper the development of green energy. Legacy systems that are cash cows can slow down the development of new industries,” Sullivan said.
However, he also noted that, as seen in China’s transition, the development of green energy does not necessarily hinder the growth of new energy sectors.
“The development of green energy as the Chinese used coal to develop their green energy. So, it is not necessarily the case that being successful in legacy energy will slow down the growth of new energy,” he explained.
Saudi Arabia has set a bold target of deriving 50 percent of its power generation from renewables by 2030. According to Brishimov, this goal presents significant challenges, especially in terms of the speed of infrastructure deployment. “In excess of 100 GW of renewable capacity will need to be deployed by 2030,” he said.
He further noted that Saudi Arabia is addressing this challenge by using a combination of renewable energy auctions and direct deployment by the Public Investment Fund (PIF) to ensure rapid progress. Additionally, the Kingdom is pursuing ambitious localization targets within the renewable energy sector. “These targets must be achieved in parallel, without hindering the speed of deployment or the commercial attractiveness of renewable energy projects,” Brishimov explained.
Balancing old and new energy systems
Energy experts have long emphasized the importance of a gradual transition to renewables, rather than a sudden shift away from traditional energy sources. Haitham Al-Ghais, secretary- general of OPEC, stated in July that oil will continue to play a crucial role in future energy pathways, particularly as petroleum products remain essential for various industries, including electricity generation.
“Oil will continue to play a pivotal role in future energy pathways,” Al-Ghais said. He added that OPEC member countries, including Saudi Arabia, are developing clear national electrification plans that align with efforts to reduce emissions.
Sullivan shared a similar perspective, arguing that the future energy landscape should incorporate both traditional and renewable energy systems to ensure energy security. “For energy and economic security, resilience, and reliability, both new and old systems need to be developed. Oil will be needed for a long time to come,” he said.
He concluded: “Saudi Arabia and many in the GCC can also gain by jumping onto the new energy train. If anything, it brings business and economic diversification for a risky future of change.”
Pakistan weekly inflation increases for third week in a row
- Pakistan’s annual consumer inflation slowed to 4.9 percent in November, lower than the government’s forecast
- Major increase observed in prices of chicken, tomatoes, sugar, vegetable ghee, liquefied petroleum gas and soap
ISLAMABAD: Short-term inflation, measured by the Sensitive Price Index (SPI), has risen to 5.08 percent in Pakistan on a year-on-year basis, the country’s statistics bureau said this week, with an increase observed in prices of edible items.
The SPI, which comprises 51 essential items collected from 50 markets in 17 cities, is computed on a weekly basis to assess the price movement of essential commodities at shorter interval of time so as to review the price situation in the country.
The SPI for the week ending on Dec. 26 increased by 0.80 percent as compared to the previous week, according to the Pakistan Bureau of Statistics (PBS). This is the third time short-term has increased in the South Asian country. Weekly inflation last decreased by 0.34 percent in Pakistan in the week ending on Dec. 5.
“During the week, out of 51 items, prices of 17 (33.33 percent) items increased, 10 (19.61 percent) items decreased and 24 (47.06 percent) items remained stable,” it said in a report.
Major increase was observed in prices of chicken (22.47 percent), tomatoes (20.75 percent), sugar (2.19 percent), vegetable ghee 1 kilogram (1.17 percent), firewood (0.95 percent), cooking oil 5 liter (0.74 percent), cooked beef and mustard oil (0.69 percent) each, liquefied petroleum gas (0.18 percent) and washing soap (0.09 percent).
The items that recorded a decrease in prices included onions (8.13 percent), potatoes (2.38 percent), bananas (0.68 percent), rice (0.50 percent) and eggs (0.30 percent).
Pakistan’s annual consumer inflation slowed to 4.9 percent in November, lower than the government’s forecast, according to the PBS. The finance ministry had projected inflation would slow to 5.8 percent-6.8 percent in November and ease to 5.6 percent-6.5 percent in December.
Consumer inflation cooled from 7.2 percent in October, a sharp drop from a multi-decade high of nearly 40 percent in May 2023.
Suzuki Motor former boss Osamu Suzuki, who turned minicar maker into global player, dies at 94
- Suzuki was known for his candid remarks and friendliness, calling himself an ‘old guy from a small to mid-size company’
- Born on Jan. 30, 1930 as Osamu Matsuda, Suzuki worked in banking after graduating from Tokyo’s Chuo University School of Law
TOKYO: Osamu Suzuki, the charismatic former boss of Suzuki Motor Corp. who helped turn the Japanese mini-vehicle maker into a globally competitive company, has died, the company said Friday. He was 94.
Suzuki was known for his candid remarks and friendliness, calling himself an “old guy from a small to mid-size company.” He became CEO of Suzuki in 1978 and was leading the company when it became the first Japanese automaker to start local production in India, where its cars proved hugely popular.
Born on Jan. 30, 1930 as Osamu Matsuda, Suzuki worked in banking after graduating from Tokyo’s Chuo University School of Law. He joined Suzuki Motor, which is based in the central Japanese city of Hamamatsu, in 1958 when he married a daughter of the company’s then-president Shunzo Suzuki, who belonged to the company’s founding family. As is sometimes the custom in such situations, Matsuda adopted his wife’s maiden name.
In 1979, a year after he became Suzuki Motor’s fourth company president, he launched an affordable minicar, which became a big hit and was promoted to world markets.
Under Suzuki’s leadership, the company’s sales grew more than tenfold to 3 trillion yen ($19 billion) in the 2000s.
Suzuki also led business tie-ups with other global leaders such as General Motors and Volkswagen AG in the 2000s. Amid intensifying competition and industrial transformation, Suzuki also formed a capital alliance with Toyota Motor Corp. in 2019 to co-develop self-driving vehicles.
While other Japanese automakers have expanded in the US and Chinese markets, offering a wide range of vehicles, Suzuki has stuck with mini and compact cars, mostly in South and Southeast Asia.
Suzuki stressed the importance of understanding the grassroots level.
“Making good quality and low-price products is the basis of manufacturing,” Suzuki once told an interview with the broadcaster NHK television. “We cannot lower costs while sitting in the offices of president or chairperson, so I have to be in a factory to understand the work and get ideas.”
Suzuki stepped down as president at age 85 in 2015, handing the post to his son, Toshihiro Suzuki. He served as an adviser to the company after resigning as chairman in 2021.
The company said Suzuki died Wednesday of malignant lymphoma.
BNPL emerges as the preferred payment option for Saudi consumers
RIYADH: The fintech landscape in Saudi Arabia is rapidly transforming daily financial practices, with buy now, pay later services gaining significant popularity. This shift is simplifying access to flexible payment options, reshaping how people manage their finances and make purchases across the nation.
According to a recent report from leading BNPL provider Tabby, 77 percent of Saudi consumers now use BNPL for essential purchases.
Data from Tabby shows that first-time BNPL transactions are twice as likely to be for necessary items rather than discretionary ones, with education and medical expenses at the forefront. This indicates that a large portion of BNPL usage is dedicated to essential transactions rather than non-essential wants.
Tabby’s data also reveals that the average value of essential purchases made through BNPL is higher than that of discretionary spending. This suggests that while consumers are prioritizing needs, BNPL offers an accessible and affordable way to purchase high-value necessities, such as insurance and home goods.
Impact of BNPL
By allowing payments to be spread over an extended period, BNPL has revolutionized shopping habits. Not only does it provide consumers with more control over their finances, but it also alters their relationship with businesses.
In an interview with Arab News, Tarabut CEO Abdulla Al-Moayed explained that the rise of BNPL among Saudi consumers can be attributed to several factors.
“BNPL’s interest-free installment structure makes it an attractive and Shariah-compliant payment option for many Saudi consumers — a positive shift from traditional credit cards or loans,” he said.
“Because BNPL offers a low-barrier alternative to traditional credit, it doesn’t require a high credit score or lengthy approval process, making it accessible to a wider population, particularly younger and lower-income individuals. The ease of using BNPL through mobile apps and online platforms also aligns well with a generation that values convenience and speed,” Al-Moayed added.
He also pointed out that the supportive regulatory environment in Saudi Arabia has fueled the rapid growth of fintech solutions, leading to the emergence of various local BNPL providers. This increased competition has ultimately led to better services and offerings for consumers.
Arjun Vir Singh, partner and global head of fintech at business intelligence firm Arthur D. Little, offered another perspective on the surge in BNPL adoption. He noted that the e-commerce boom, accelerated by COVID-19, has significantly driven the growth of BNPL among consumers. Singh also emphasized the growing convergence of online and offline shopping experiences.
“As customers’ journeys and payment methods in-store and offline become increasingly digital, we expect BNPL adoption to expand into this segment as well,” he said.
Singh further explained that digital payments, seamless integration, merchant sponsorship, and the rising cost of living have all contributed to BNPL’s rapid growth.
BNPL vs. traditional credit
Singh noted that BNPL is beginning to disrupt traditional credit models in consumer finance, a trend that is expected to expand as BNPL adoption spreads across sectors like travel, real estate, and automotive. “Arguably, the biggest impact will come if BNPL successfully expands into the B2B credit and financing segment,” he stated.
Singh also highlighted that banks and credit card companies are already responding to the rise of BNPL by adjusting their consumer finance offerings. Many are now partnering with BNPL providers or collaborating with major players like Visa and Mastercard, which are concerned about losing consumer spending. Some banks are even developing their own flexible payment solutions that mimic the BNPL model.
For Al-Moayed, the simplicity, transparency, and digitalization of consumer credit will force traditional credit models to adapt.
“Traditional credit models that rely on rigorous background checks and higher entry barriers need to evolve quickly while still managing risk effectively, in order to appeal to a broader consumer base and offer more flexible, secure, and customer-friendly credit options,” he said.
He also emphasized the role of Open Banking in this evolution, saying it could revolutionize credit risk management by utilizing real-time and historical behavioral data. “Open Banking has the potential to make a significant impact by giving lenders more agile and secure access to data, enabling personalized credit solutions,” Al-Moayed added.
As BNPL expands consumer spending power, he believes that as the market matures, empowered consumers will become more financially literate, leading to better-informed financial decisions.
“Open Banking will help by providing enriched data to improve insights into consumers’ financial health, preventing unsustainable debt,” he said.
Al-Moayed also pointed out that early adopters of Open Banking will gain a competitive edge by providing more intelligent financial services, better user experiences, and faster, more affordable options for all consumers.
Singh concurs, noting that as traditional players adjust to the changing landscape, innovation in consumer finance will continue to flourish. “This shift includes segmenting customers based on different criteria, using alternative data to enhance credit models, and adapting models to the nature of the spend. Innovation is also extending to customer service, not just credit models,” Singh said.
Merchants and BNPL
“Retailers have been the greatest sponsors of BNPL, helping to legitimize and drive the growth of e-commerce,” said Singh. This was initially true for e-commerce platforms, but as more retail experiences shift online, BNPL adoption among merchants has grown exponentially. “The adoption of digital payment solutions across all retail models is driving BNPL growth,” Singh added.
Arthur D. Little’s proprietary research has shown that merchants are seeing substantial benefits from BNPL, including increased average transaction values, more frequent purchases, access to new customers, and lower customer acquisition costs. Merchants also enjoy a differentiated offering compared to their competitors.
Al-Moayed agrees that BNPL offers numerous advantages for merchants but suggests that more value could be unlocked by leveraging the data collected on consumer behavior and spending patterns. “Merchants should explore how to use this valuable data to offer personalized promotions or product recommendations,” he said.
“Hyper-personalized sales and marketing will be key to increasing customer engagement and loyalty. This will soon be expected across the Kingdom’s retail market,” Al-Moayed added.
The future of BNPL
“Over the next few years, BNPL services will become even more integrated into the broader financial ecosystem, using Open Banking to enhance personalization and accessibility,” said Al-Moayed.
He also foresees the global adoption of big data and artificial intelligence further enhancing the BNPL customer experience. “We may see BNPL providers developing educational tools to help consumers manage their financial health effectively while using these services,” he added.
Singh, however, envisions a different future for BNPL. “BNPL will expand into the B2B segment, particularly as a tool to service underserved micro and small businesses,” he said.
Singh also predicts that AI, enhanced regulations, and market consolidation will all play crucial roles in BNPL’s future growth.
