Saudi Arabia’s card payments market is expected to grow by 14.6% to reach 532.1 billion Saudi riyals ($141.9 billion) in 2023, driven by contactless payments and the government’s push for a cashless society, London-based data and analytics firm GlobalData reported.

Card payment value in the kingdom registered a growth of 29.8% in 2021 and 17.3% in 2022, driven by improving economic conditions and a rise in consumer spending.

“While cash has traditionally been the preferred method of payment 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, GlobalData.

“The e-payment trend became more prevalent during COVID-19 pandemic, with banks and merchants urging consumers to use non-cash payment methods to help contain the spread of the virus,” he added.

The kingdom’s Vision 2030 plan aims to reduce cash transactions and increase the share of electronic payments to 70% of all transactions by 2025. 

“This will greatly benefit the debit and credit card adoption and usage,” said Sharma.

Saudi Payments, the country’s national payment infrastructure operator, has reported that 95% of all point of sale (POS) transactions were contactless in 2021.

Regarding card preference, debit cards dominate the overall card payment space accounting for 89% of the overall card payment value in 2022.  

Saudi consumers are gradually embracing electronic payments, moving away from cash, supported by the government push and improvement in payment infrastructure, Sharma said.

The kingdom’s card payments market will likely grow at a strong compound annual growth rate (CAGR) of 10.2% between 2023 and 2027 to reach 785.8 billion Saudi riyals ($209.5 billion) in 2027, he predicted.

(Editing by Seban Scaria )