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Saudi Arabia’s Card Payments Expected to Grow by a Double-Digit in 2023 – GlobalData

Date:

The Saudi Arabian card payments market is expected to
grow in 2023 due to an increase in preference for electronic cash payments and a push for a cashless society by the Kingdom, according to data analytics firm GlobalData.

“The Saudi Arabia
card payments market is expected to grow by 14% in 2023 to reach SAR 532.1
billion ($141.9 billion),” noted GlobalData “The growth will be
driven by increasing preference for electronic payments, a surge in contactless
payments, and government’s push for a cashless society.”

GlobaData’s report shows that card
payment value in Saudi Arabia increased by 30% and 17% in 2021 and 2022, respectively, driven
by improving economic conditions and a surge in consumer spending.

While cash has been the
most preferred mode of payment in Saudi Arabia, its use is declining. This trend was mostly seen during the Covid-19 pandemic period when banks and merchants urged users
to switch to electronic payments to contain the spread of the virus, GlobalData
said.

Additionally, the Kingdom aims to reduce the use of cash payments in line with the
country’s Vision 2030
. This is even as Saudi
Payments, the country’s national payments infrastructure providers,
reported that in 2021, 95% of all POS transactions were cashless.

Ravi Sharma, Lead
Banking and Payments Analyst at GlobalData, says the trend could continue. “The Saudi Arabia card payments market is expected to grow at a strong
compound annual growth rate (CAGR) of 10% between 2023 and 2027 to SAR785
billion ($209 billion) in 2027.”

Debit Cards Most Preferred in the Kingdom

Notably, debit cards are the most preferred bank cards in Saudi
Arabia, driven by the preference for debt-free payments. According to Saudi Payments, debit card payments accounted for about 90% of all card
payments in the country in 2022.

Beyond card payments,
Saudi Arabia is among the countries exploring the potential of a central
bank digital currency (CBDC)
.
Specifically, the Kingdom is reportedly focusing on domestic CBDC use cases,
potential collaborations with local banks, and fintech firms.

In 2019, Saudi Arabia collaborated with the Central Bank of the UAE on an exercise dubbed Project Aber to assess the benefits
of decentralized payments technology
. In particular, the project aims to adopt Distributed Ledger Technology in settlements of assets like bonds.

Brokeree, Advance Markets partner; illegal brokers; read today’s news nuggets.

The Saudi Arabian card payments market is expected to
grow in 2023 due to an increase in preference for electronic cash payments and a push for a cashless society by the Kingdom, according to data analytics firm GlobalData.

“The Saudi Arabia
card payments market is expected to grow by 14% in 2023 to reach SAR 532.1
billion ($141.9 billion),” noted GlobalData “The growth will be
driven by increasing preference for electronic payments, a surge in contactless
payments, and government’s push for a cashless society.”

GlobaData’s report shows that card
payment value in Saudi Arabia increased by 30% and 17% in 2021 and 2022, respectively, driven
by improving economic conditions and a surge in consumer spending.

While cash has been the
most preferred mode of payment in Saudi Arabia, its use is declining. This trend was mostly seen during the Covid-19 pandemic period when banks and merchants urged users
to switch to electronic payments to contain the spread of the virus, GlobalData
said.

Additionally, the Kingdom aims to reduce the use of cash payments in line with the
country’s Vision 2030
. This is even as Saudi
Payments, the country’s national payments infrastructure providers,
reported that in 2021, 95% of all POS transactions were cashless.

Ravi Sharma, Lead
Banking and Payments Analyst at GlobalData, says the trend could continue. “The Saudi Arabia card payments market is expected to grow at a strong
compound annual growth rate (CAGR) of 10% between 2023 and 2027 to SAR785
billion ($209 billion) in 2027.”

Debit Cards Most Preferred in the Kingdom

Notably, debit cards are the most preferred bank cards in Saudi
Arabia, driven by the preference for debt-free payments. According to Saudi Payments, debit card payments accounted for about 90% of all card
payments in the country in 2022.

Beyond card payments,
Saudi Arabia is among the countries exploring the potential of a central
bank digital currency (CBDC)
.
Specifically, the Kingdom is reportedly focusing on domestic CBDC use cases,
potential collaborations with local banks, and fintech firms.

In 2019, Saudi Arabia collaborated with the Central Bank of the UAE on an exercise dubbed Project Aber to assess the benefits
of decentralized payments technology
. In particular, the project aims to adopt Distributed Ledger Technology in settlements of assets like bonds.

Brokeree, Advance Markets partner; illegal brokers; read today’s news nuggets.

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