Saudi Arabia Cards and Payments Market Research Report: Forecast (2024-2030)

Market Definition

Cards and Payments refer to the systems and processes enabling financial transactions through various payment methods, including credit cards, debit cards, and digital wallets. It encompasses the issuance of payment cards, transaction processing, and the infrastructure supporting electronic payments, ensuring the secure and efficient exchange of funds between individuals & businesses.

Market Insights & Analysis: Saudi Arabia Cards and Payments Market (2024-30):

The Saudi Arabia Cards and Payments Market is estimated to grow at a CAGR of around 8.5% during the forecast period, 2024-30. The growth of Cards and Payments in Saudi Arabia is spurred by the government's concerted efforts to enhance digital infrastructure through technological advancements. Seeking to diversify the economy from its reliance on oil, the government has initiated investment plans aimed at improving residents' quality of life by developing leisure facilities, attractions, and infrastructure across the country.

Additionally, initiatives mandating premium establishments to accept cashless transactions, coupled with the rising employment rate, contribute to the growing bankable population, as salaries are deposited directly into bank accounts. Furthermore, the growing popularity of cards over traditional cash payments is fueled by their convenience & efficiency. This trend is boosted by the rising adoption of touchless technologies, which enable seamless and contactless transactions, thus elevating the market share.

Besides, as consumer preferences evolve towards digital payments and contactless transactions, financial service companies are responding by integrating and launching new card solutions to meet the growing demand. These initiatives not only cater to the evolving needs of end-users but also align with the government's vision of promoting a cashless economy and fostering financial inclusion.

Consequently, by leveraging innovative technologies and expanding card offerings, financial service providers aim to enhance the payment experience and support the ongoing transformation of the cards and payments landscape in Saudi Arabia. Also, the significant traction toward contactless technologies would further upsurge demand for new smart cards, enhancing the Saudi Arabia Cards and Payments Market size in the forthcoming years.

Saudi Arabia Cards and Payments Market Driver:

Growing Digital Adoption by Medium-scale & Large-scale Enterprises to Augment the Market – Saudi Arabia is an oil-rich country, and to diversify its financial resources, the government has laid down plans such as investment in construction projects, facilitation of public-private partnerships, and adoption of technologies to improve the digital infrastructure. Also, the country's government has introduced Vision 2030, which aims to promote the adoption of digital payments, including e-wallets, credit cards, and debit cards, to enhance the country's digital economy. Thus, this government-led vision has led medium-scale enterprises like prominent fast food outlets, hotels, etc., to accept digital payments via cards & wallets.

Further, the bankable population of Saudi Arabia has also expanded over the past few years. As a result, the surge in consumers opting for conventional digital payment methods is enhancing. According to the King Khalid Foundation, in 2022, 72% of the population in Saudi Arabia possessed bank accounts. Therefore, the growing bankable population & the digital adoption by different sectors are amplifying the demand for cards & payment in Saudi Arabia.

Saudi Arabia Cards and Payments Market Opportunity:

Rising Collaboration Between Financial Institutions & Tech-based Companies – The zero tax policies on the salaries withdrawn & lucrative job opportunities are propelling the young talent to mitigate to Saudi Arabia, as a result, the population of expatriates has been on the rise for the past few years. Hence, the aforesaid has resulted in a notable upsurge in foreign payments since individuals send some share of their salaries to their native hometown. These foreign transactions are possible via different cards offered by companies, such as Visa, Mastercard, etc. Hence, the companies have started collaborating with the National Bank of Saudi Arabia to provide different cash reward points & engage more consumers. For instance:

• In 2022, the Saudi British Bank partnered with Visa to launch SABB Visa Platinum Credit Card, which offers unlimited cashback on foreign transactions at 2% & local purchases at 1%.

This increasing demand for rewarding credit cards in Saudi Arabia is driving partnerships between financial service providers and banking institutions. Hence, this trend aims to enhance the banking experience & meet the growing interest of end-users in reward programs, thereby boosting the market for banking cards in the country.

Saudi Arabia Cards and Payments Market Challenge:

Acceptance of Only Cash in Small Shops in Saudi Arabia to Hinder the Market – In Saudi Arabia, some merchants prefer alternative payment methods over credit cards and debit cards due to considerations related to additional service or processing fees associated with card transactions. Moreover, owing to the lower profit margin of the merchant, small shops ought not to accept digital payments. Additionally, the cash payment gives the merchant the security of being paid by the consumers. However, in digital transactions, the merchant or business owner worries about failed transactions. Therefore, the local shop owners accept payment via cash only, impeding the Saudi Arabia Cards and Payments Market.

In addition to this, opening bank accounts in the country requires individuals to have legal identification documents to verify their identities per international standards. Therefore, individuals who do not have valid mobility documents or residency permits are restricted from owning a bank account or having banking cards, further negatively affecting the market outlook.

Saudi Arabia Cards and Payments Market Trend:

Integration of Smart Touchless Technologies Gaining Traction – Owing to the rising technological advancements, financial service providers & financial institutions comprising commercial banks & other investment banks are integrating new touchless technologies in credit cards, debit cards, fleet cards, etc., to improve the user experience. These touchless technologies enable consumers to complete touch-free transactions with systems, thereby meeting health & safety requirements.

To make the end-user experience seamless, companies like Visa & Master card are launching products such as tap-to-go cards designed using these touchless technologies, making payment simple & preferable by consumers. Also, the significant adoption of the new innovative tech in the financial sector as well as by the consumers is gaining traction, further augmenting the Saudi Arabia Cards and Payments Market expansion in the coming years.

Saudi Arabia Cards and Payments Market (2024-30): Segmentation Analysis

The Saudi Arabia Cards and Payments Market study by MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment & includes predictions for the period 2024–2030 at the national level. In accordance to the analysis, the market has been further classified as:

Based on Card Type

• Debit Cards
• Fleet/Fuel Cards
• ATM Cards
• Prepaid Cards
• Credit Cards

The Debit Cards segment held the largest share of the Saudi Arabia Cards and Payments Market in the historical years and is predicted to flourish during 2024-30, owing to the increasingly rising bankable population in the country. End-users now prefer cards for payments due to the additional benefits they provide, like reward points, cashback offers, etc., and enhanced security.

Debit cards allow us to withdraw funds directly from an individual's bank account, which makes the consumer shop more responsibly. Furthermore, as per the data delivered by the financial consultant company, ‘Adyen,’ in 2022, there were about 31 million cards that were issued, out of which 88% were debit & 12% were credit. Therefore, the surging use of debit cards by consumers due to the surging digital adoption in the country & rapid urbanization would further boost the share of debit cards in the forecast years.

Based on Type of Payments:

• B2B
• B2C
• C2C
• C2B
  • E-Commerce Payments
  • Payments at POS Terminals

The Customer Business (C2B) segment emerged as one of the dominant types of payments in the Saudi Arabia Cards and Payments Market. This has been fueled by the widespread adoption of the Internet & smartphones, significantly boosting e-commerce activities across the region. Particularly in Saudi Arabia, e-commerce shopping has witnessed substantial growth, driven by consumers' increasing preference for online purchases due to convenience, security, and engaging digital experience that it offers. Furthermore, the surge in cashless payment usage is also expected to further propel market growth in the foreseeable future.

Saudi Arabia Cards and Payments Industry Recent Development:

• 2023: Saudi National Bank (SNB) and Japan-based card scheme JCB International have collaborated to enable the acceptance of JCB Cards across the Kingdom of Saudi Arabia via an extensive network comprising over 306,351 POS terminals and 3,088 ATMs. This partnership aims to provide convenience for JCB cardholders in the Middle East, enhancing their access to financial services within the SNB network.
• 2023: Al Rajhi Banking & Investment Corp and American Express Saudi Arabia entered a strategic agreement, permitting American Express Card members to utilize Alrajhi Bank's ATM terminals for cash withdrawals. This collaboration expands American Express's network by over 4,500 ATM terminals, providing enhanced accessibility & convenience for its customers across the Kingdom.

Gain a Competitive Edge with Our Saudi Arabia Cards and Payments Market Report

• Saudi Arabia Cards and Payments Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• Saudi Arabia Cards and Payments Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.