Saudi Arabia Sees Surge in Point-of-Sale Payments, Embracing Digitalization
In a move reflecting Saudi Arabia’s commitment to digitalization and tech-driven future, point-of-sale (POS) payments in the Kingdom saw an 11 percent annual increase in January, reaching SR53.8 billion ($14.35 billion) according to data from the Saudi Central Bank.
POS Spending Breakdown
The largest portion of POS spending in January was on beverages and food, accounting for 16 percent of the total at SR8.44 billion. Following closely was spending on restaurants and cafes, making up 15 percent and reaching SR8.14 billion, as per data from the central bank, also known as SAMA.
A notable surge in spending on miscellaneous goods and services, which includes personal care items, supplies, maintenance, and cleaning, represented the largest portion at 20 percent of the overall increase in POS sales during the period. This category accounted for 12 percent of the total expenditure in January 2024, reaching SR6.47 billion with a growth rate of 21 percent.
Focus on Digital Government and Tech Expansion
The establishment of Saudi Arabia’s Digital Government Authority in March 2021 aims to drive the digitization of utility payments and create an efficient digital government, integrating state entities and improving service delivery through technology to provide secure and accessible government services.
Riyadh emerged as the city with the highest number of POS transactions at 34 percent, followed by Jeddah at 14 percent, showcasing the evolution of Riyadh into a bustling business and digital hub with a growing urban population.
Future Vision and Fintech Expansion
Saudi Arabia’s Vision 2030 targets a 70 percent non-cash transaction rate by 2030, setting the stage for significant fintech expansion. With government support and a tech-savvy population eager to adopt innovative payment methods, the market is poised for growth.
Data from SAMA revealed a reduction in bank cash withdrawals and the closure of 354 ATMs since January 2023, indicating a shift towards digital payment methods. Mastercard’s recent partnership with Loop aims to offer advanced credit card options and cutting-edge payment solutions in Saudi Arabia.
Partnerships and Investments in Tourism
Collaborations and investments in technologies, such as the partnership between Amazon Payment Services and Red Sea Global, aim to enhance the tourist experience in Saudi Arabia and support the goals of Saudi Vision 2030 to strengthen the tourism and heritage sector.
Overall, Saudi Arabia’s efforts in digitalization, tech expansion, and financial inclusion demonstrate a proactive approach towards embracing a digital future and fostering economic growth.