Saudi Arabia’s card payments market is projected to grow by 7.6% to 550.5 billion riyals ($146.8 billion) in 2024, according to a report by data and analytics company GlobalData.

The growth will be fuelled by a rising consumer preference for electronic payments, a surge in contactless payments and the government’s push for a cashless society.

The card payments market is expected to grow at a compound annual growth rate (CAGR) of 6.4% between 2024 and 2028 to reach SAR 705.2 billion in 2028.

Card payment value grew 17.8% in 2022, followed by a 9.7% rise in 2023 to SAR 511.5 billion, driven by increased consumer spending, the report said.

“While cash has traditionally been a preferred payment method in Saudi Arabia, its usage is on the decline in line with the rising consumer preference for electronic payments,” said Ravi Sharma, Lead Banking and Payments Analyst at GlobalData.

The country has a robust digital payment infrastructure, supported by a developing card market and a well-established card acceptance infrastructure, he added.

The government is taking steps to enhance the infrastructure by encouraging merchants to adopt at least one electronic payment option apart from cash, Sharma said.

Saudi Vision 2030 aims to reduce cash transactions and increase the share of electronic payments to 70% of all transactions by 2025.

Contactless cards have been on the rise, with the Saudi Central Bank (SAMA) reporting 363.4 million transactions using NFC-enabled Mada cards in February 2024, compared to 331.7 million in February 2023.

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

(Editing by Brinda Darasha; brinda.darasha@lseg.com)