Every country is unique and has individualized ways to transform its payments system. However, all share these tangible benefits of a more digital economy: better consumer convenience, efficient governance, higher business productivity and greater mainstream financial inclusion for all citizens.

In pursuit of these benefits, Saudi Arabia is fostering innovation and modernizing the nation’s payments infrastructure. Proactive efforts by Saudi Payments have been visible in industry growth across segments: PoS transactions, merchant adoption, growth in digital wallets, a rise in online payments, and in many more fronts in digital payments. Read about market trends and analysis in Section II: Payments landscape through the numbers.

According to Voice of Consumer survey findings, both Generation Z and millennials in Saudi Arabia frequently use credit cards, debit cards and mobile payments. For all age groups, mada cards are the most popular cashless payment platform, with 55% of millennials and 38% of Generation Z using them. They are also frequently utilized by older Gen X (68%) and Baby boomers (62%). Credit cards are most popular with Gen X and millennials, and only slightly less among Baby boomers and Generation Z. Mobile payments are also commonly used by these demographic groups. Millennials mostly prefer advanced solutions, such as mobile payments systems (54%) and QR code-based e-wallets (24%).

mada e-commerce payment volumes suggest that telecom retailers / utilities sector currently account for the largest share of e-commerce payments by volume and value. While restaurants are ranked the second-largest by volume of e-commerce payments, their value per payment is smaller than that of other categories.

The growing number of PoS terminals at retail outlets – especially at gas stations, pit shops, restaurants, and convenience stores – has significantly boosted digital payments in Saudi Arabia. The number of NFC-based PoS terminals in the country increased at a CAGR of 61% from 2017–2019.

Saudi consumers indicated cash as the preferred payment method for low-value transactions, with 29% of respondents favoring it over other payment modes in this category. However, for medium or high-value transactions, customers indicated cashless payment methods, specifically mada cards, as the preferred payment option. Online banking also emerged as one of the most preferred payment methods for high-value transactions. Preference for cashless methods for high-value transactions reflects customers growing trust in the cashless payment systems.

Saudi Arabia's Vision 2030 offers an ambitious economic development roadmap to diversify the Kingdom's economy beyond the oil sector. A national change-management program driven by the rapid adoption of digital initiatives aims to redirect the country’s economic model to innovation and future technologies. Market stakeholders–including regulators, merchants, FinTech companies, service providers, and banks–support the country’s goals by encouraging cashless payment methods and promoting overall sustainable socio-economic development.

Together, SAMA and Saudi Payments nurture innovation to create a sustainable industry operating model with an inside-out perspective realized through shared best practices, global benchmarking exercises, and domestic industry analysis. Market participants and technological developments form part of the outside-in hemisphere from a demand-side perspective, with requirements met by the supply-side, both in terms of policymaking and operating environment. Details about this economic symbiosis are outlined in Section III: Future of the payments ecosystem in growing Saudi Arabia.

A collaborative vision shared by industry stakeholders will help to drive a sustainable ecosystem for the future. SAMA and Saudi Payments are nurturing innovation to create a sustainable operating model with an "inside-out" perspective attained by sharing best practices, global benchmarking exercises, and domestic industry analysis. Market participants and technological developments form part of the “outside-in” hemisphere from a demand-side perspective, with requirements met by the supply-side, both in terms of policymaking and operating environment.

SAMA has taken multiple steps to boost the growth of digital payments in recent years. Its initiatives, projects, and investments aim to improve financial inclusion, enhance payment experience, increase security, and stimulate overall socio-economic growth in Saudi Arabia.

Since its inception, Saudi Payments has worked together with multiple industry stakeholders to develop a cohesive national payment system and reliable infrastructure to benefit the whole economy. SAMA steadily rolled out products over the past two decades, and now Saudi Payments operates the back-end infrastructure of four platforms (mada, SADAD, SARIE, and Esal) to create parity among market players.

Saudi Payments’ initiatives are resonating with industry stakeholders’ expectations. Investment in infrastructure and collaboration among different financial entities emerged as priorities in an industry stakeholder survey by Saudi Payments. Stakeholders also suggested that taking cues from other advanced economies’ best practices may help to promote cashless adoption throughout the KSA.

FinTechs are foreseen to be expanding their offerings / solutions in multiple areas by taking clues from best practices and innovative solutions launched across the globe.

Few of prominent socio-economic benefits from digital payments' development include increased SMEs contribution to GDP, improved security, and increase in financial literacy rates. It is expected that the development of the digital payments ecosystem will be expedited as the country begins to realize these socio-economic benefits.