The Saudi Arabia card payments market is forecast to grow by 7.6% to reach SR550.5bn ($146.8bn) in 2024, driven by consumers’ increasing preference for electronic payments, a surge in contactless payments, and the government’s push for a cashless society, according to GlobalData.

GlobalData’s Payment Cards Analytics, reports that card payment value in Saudi Arabia registered a growth of 17.8% in 2022, followed by 9.7% in 2023 to reach SR511.5bn ($136.4bn), driven by a rise in consumer spending.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, commented: “While cash has traditionally been a preferred method of payment in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments. The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure. The government is taking steps to enhance the infrastructure in the country by encouraging merchants to adopt at least one electronic payment option apart from cash.”

Cash remains an integral part of the Saudi consumer payments landscape, particularly for lower-value transactions

However, there has been a consistent decline in cash usage, while electronic payment methods have witnessed an increase. 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 Covid-19 pandemic changed the way Saudi consumers make payments, with an increasing number of consumers preferring contactless payments supported by an improved payment infrastructure. Contactless cards have been on the rise in the country with the Saudi Arabian central bank reporting 363.4 million transactions using NFC-enabled mada cards in February 2024 compared to 331.7 million in February 2023. This surge was supported by a robust contactless payment infrastructure, with 1.8 million POS terminals driving contactless payments as of February 2024.”

In terms of card preference, debit cards dominate the overall card payment space, accounting for 85% of the overall card payment value in 2023. 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.

Sharma concludes: “Saudi consumers are gradually embracing electronic payments, moving away from cash, supported by government push, improvements in payment infrastructure, growing consumer awareness, and rising adoption of newer technology like contactless. The Saudi card payments market is forecast to grow at a compound annual growth rate (CAGR) of 6.4% between 2024 and 2028 to reach SR705.2bn ($188.1bn) in 2028.”