Saudi Arabia card payments market to grow at 13.6% CAGR between 2022 and 2026
The card payments market in Saudi Arabia is expected to grow at a strong compound annual growth rate (CAGR) of 13.6% between 2022 and 2026 to reach SAR822.1 billion ($219.2 billion) in 2026, forecasts GlobalData. According to the leading data and analytics company, growth will be driven by consumers’ increasing preference for electronic payments, a surge in contactless payments, and the government’s push for a cashless society. contactless payment saudi arabia
Saudi Arabia is among the top markets globally for contactless payment adoption, with nine in 10 transactions made with contactless cards or devices throughout the Kingdom, according to digital payments giant Visa. In line with Saudi Vision 2030’s goal to reduce the country’s reliance on cash, Saudi Arabia has made great strides in near-field communication adoption.
According to GlobalData’s report, ‘Saudi Arabia Cards and Payments: Opportunities and Risks to 2026’, card payment value in Saudi Arabia registered a growth of 30.7% in 2021 driven by improving economic conditions and a rise in consumer spending. The trend is expected to continue, with total card payments reaching SAR492.8 billion ($131.4 billion) in 2022, registering a growth of 23.3%.
Growth in the card payment market will mainly be driven by debit cards, which accounted for 86.7% of the overall card payment value in 2021. The government’s financial inclusion initiatives, consumers’ preference for debt-free payments, and prudent consumer spending have resulted in their dominance. Credit and charge cards, on the other hand, are not very popular in Saudi Arabia primarily due to a religious aversion towards debt.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “While cash remains a preferred payment method in Saudi Arabia, the share of cash in total payments is declining, with rising consumer preference for electronic payments. This trend became more prevalent amid COVID-19, with banks and merchants urging consumers to use non-cash payment methods to help contain the spread of the virus. The increasing preference for contactless payments and mandatory acceptance of electronic payments at retail stores are among the key drivers of the growth of the payment card market.”
The government also aims to reduce the country’s dependence on cash, promote electronic payments, and encourage payment innovation. The Kingdom’s Vision 2030 plan is aimed at reducing cash transactions and increasing the share of electronic payments to 70% of all transactions by 2025. This will greatly benefit debit and credit card adoption and usage.
Sharma adds: “The pandemic changed the way Saudi consumers make payments, with an increasing number of consumers preferring contactless payments supported by an improved payment infrastructure. According to the country’s national payment infrastructure operator, Saudi Payments, 91% of all point of sale (POS) transactions in the country were contactless in September 2020, compared to 66% in September 2019. This trend has been supported by a robust contactless payment infrastructure, with over 1 million POS terminals supporting contactless payments as of December 2021.” contactless payment saudi arabia
