The year 2023 saw a notable expansion of the digital payment scene in Saudi Arabia, as the combined value of e-commerce and point-of-sale (POS) transactions reached $206 billion. This increase reflects the nation’s quick adoption of digital innovations, which is being fueled by the government’s Vision 2030 strategy as well as the market’s proliferating fintech and telco companies.
Saudi Arabia’s Digital Payments Are Growing
The e-commerce industry in Saudi Arabia is expected to grow at a rate of 13.5 percent per year. The nation’s fintech and mobile banking landscapes have advanced remarkably; mobile payments now make up 35% of the value and 45% of the volume of point-of-sale transactions—a significant rise from a few years ago. Intending to convert 70% of transactions to digital by 2025, the government has been aggressively pushing the shift to non-cash payments.
E-commerce and Point of Sale Transaction Data
In 2022, consumer expenditure through point-of-sale (POS) transactions increased by 9% to SAR 1.24 trillion, with POS transactions rising by 18% annually to SAR 559.1 billion. The volume of digital payments made online, including purchases and Mada card payments, was mostly fueled by e-commerce sales.
Telco and Fintech’s Impact
More than 150 fintechs are currently operating in the Saudi market, and telcos have also introduced their financial services, which has accelerated the uptake of mobile payments and digital wallets. Fintechs have affected internet payments, savings products, and consumer finance in addition to point-of-sale payments. This has helped the underbanked populations become more financially included.
Industry Trends and Market Dynamics
The rise of the payments market in Saudi Arabia has been fueled by the e-commerce industry’s growth as well as the government’s and major merchants’ advocacy of market digitalization. The country’s digital payment industry has grown even faster because of rising internet usage and the move from in-store to online payment methods.
The Payment Methods and Competitive Environment
A diverse range of domestic and foreign businesses are actively involved in Saudi Arabia’s e-commerce market which promotes innovation and customer-focused offerings. Major companies that control a large portion of the market include Amazon, eBay, Noon, and others. Cards are the most widely used payment method in the e-commerce sector, but e-wallet options, bank transfers, and cash on delivery are also becoming more popular.