Saudi Arabia’s card payments market, which has registered sustained growth for the past few years, is set to increase strongly by 29.6% in 2021. The increasing preference for electronic payments amid the COVID-19 pandemic and a surge in contactless payments are likely to drive the country’s card payments market between 2021 and 2025 at a strong compound annual growth rate (CAGR) of 21%, to reach SAR855.6bn ($228.2bn) in 2025, according to GlobalData, a leading data and analytics company.
Shivangi Mishra, Banking and Payments Analyst at GlobalData, comments: “Despite being a cash-dominated country, the Saudi Arabian card payments market has registered robust growth, with the card payments value rising at a CAGR of 19.9% in the period 2017-2021 to reach SAR398.9bn ($106.4bn) in 2021. This growth was supported by rising consumer awareness of electronic payments, improvement in payment infrastructure and the rise in contactless payments. Although the COVID-19 pandemic impacted consumer spending, it has also highlighted the importance of cashless payments, thereby driving the use of card payments in the country.
“Growth in the market has been driven by debit cards, which accounted for 81.8% of overall card payment value in 2021 and the frequency of debit cards use for making payments increased fourfold between 2017 and 2021. Credit and charge cards, on the other hand, are not very popular in Saudi Arabia primarily due to a religious aversion towards debt.”
The ongoing pandemic is changing the way Saudi consumers make payments with consumers preferring contactless payments to avoid contamination by the virus. According to Saudi Payments, Saudi Arabia’s national payment infrastructure operator, the share of contactless payments (using payment cards or mobile wallet) of all the POS transactions in the country increased from 66% in September 2019 to 91% in September 2020. This shift was also supported by a rise in the contactless payment limit in Saudi Arabia, which was increased from SAR100 ($26.67) to SAR300 ($80), in March 2020.