Saudi Arabia-based telecommunications firm Saudi Telecom is spinning off digital payment subsidiary STC Pay with $200m in funding from currency transfer service Western Union.
STC Pay has built a digital wallet platform that allows users to securely send and receive money as well as pay for goods and services, pay utility bills and transfer cash internationally to more than 525,000 Western Union branches.
The Western Union investment is expected to formally close in early 2021 and will give the corporate a 15% stake in STC Pay, valuing it at approximately $1.33bn.
Jean Claude Farah, president of Western Union’s global network, said: “We are very excited about this investment in STC Pay because of our demonstrated success working together.
“We believe the company is well positioned for continued growth and expansion into new digital payment services in the Gulf region. This is a great opportunity to participate in the growth potential of an innovative and dynamic financial services company such as STC Pay and supporting its growing customer base through our market leading cross-border services.”
Nasser Alnasser, chief executive of Saudi Telecom, added: “”We are proud that STC Pay has not only reached unicorn status but also has been recognised as a fintech national champion in a very short time, and that motivates us to devote more efforts to provide more products to enhance the customer’s experience.”
