Saudi Arabia’s Cashless Payments Set to Surge by 7.6% in 2024
In a groundbreaking report, GlobalData predicts that cashless payments in Saudi Arabia will skyrocket by 7.6 percent in 2024, reaching an impressive SR550 billion ($146.8 billion) compared to SR511.5 billion the previous year.
The Rise of Card Payments in Saudi Arabia
GlobalData’s analysis also forecasts the Saudi card payments market to grow at an annual rate of 6.4 percent between 2024 and 2028, reaching an estimated SR705.2 billion. This surge is attributed to the government’s efforts to transition to a cashless society by promoting card transactions.
The Decline of Cash in Saudi Arabia
Despite cash traditionally being the preferred payment method in Saudi Arabia, consumer trends are shifting towards electronic payments. This shift is evident as the usage of hard currency declines in favor of digital transactions, supported by the country’s robust digital payment infrastructure.
The Push for Digital Payments
With Saudi Arabia’s Vision 2030 aiming to reduce cash transactions and increase electronic payments to 70 percent by 2025, the government is actively encouraging merchants to adopt electronic payment options. Initiatives like promoting contactless payments have gained traction, especially during the COVID-19 pandemic.
The Dominance of Debit Cards
Debit cards currently dominate the card payment space in Saudi Arabia, accounting for 85 percent of the total card payment value in 2023. This preference is driven by government financial inclusion efforts, consumer preferences for debt-free payments, and prudent spending habits.
Changing Consumer Behavior
Saudi consumers are gradually transitioning to electronic payments, fueled by government support, advancements in payment infrastructure, increased consumer awareness, and the adoption of new technologies like contactless payments. This shift is evident in the significant increase in point-of-sale terminal transactions in the Kingdom.
Key Spending Trends
In February, data from the Saudi Central Bank revealed that the largest portion of point-of-sale spending was on beverages and food, followed by restaurants and cafes. These trends reflect the evolving payment landscape in Saudi Arabia as consumers embrace digital transactions over traditional cash payments.