The Saudi Arabian card payments market is expected to grow in 2023 due to an increase in preference for electronic cash payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and a push for a cashless society by the Kingdom, according to the data analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision-making. In the trading space, analytics are applied in a predictive manner in an attempt to forecast the price more accurately. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analy Read this Term 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."

Surging Adoption of Card Payments in Saudi Arabia

GlobaData's report shows that card payment value in Saudi Arabia increased 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 provider, reported that in 2021, 95% of all POS transactions were cashless.

Ravi Sharma, the 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.

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