Saudi Arabia Country Report

Table of Contents

A comprehensive overview of the cards, payments and consumer banking market in Saudi Arabia.

This Verisk Financial Research Country Report delivers commentary on Saudi Arabia's retail banking and payments landscape supported by historic and forecast data. The report gives detailed insight into the market's key players, including cards networks, issuers, acquirers, banks, and PSPs, plus the country's payments infrastructure, digital and mobile payments developments, demographic and consumer trends, regulatory drivers, credit card profitability, and more.

Saudi Arabia Payments Market Key Trends:

• Saudi Arabia's authorities have made cash reduction a key policy objective. The country is also looking to reduce dependence on oil and foreign workers; a range of new taxes, including VAT, have been introduced.
• Banking has gradually migrated from primarily conventional to primarily Islamic over the last decade: some 90 percent of credit cards in issue are now sharia compliant.
• Retail banking is offered by a dozen local commercial banks, though this may fall to ten through mergers, one of which (SABB and Alawwal Bank) has been agreed, subject to approval.
• Mada, the local switch and debit network, has been central to innovation, introducing contactless payments, launching a mobile wallet and enabling debit cards for online payments. The country's payments infrastructure was significantly improved with Mada's overhaul in 2015.
• Contactless payments have grown rapidly in the kingdom, accounting for one in five card payments in 2018. This is a higher proportion than in many European countries, where contactless has been available for much longer.
• Cash-on-delivery is the dominant e-commerce payment method. Until 2018, debit cards could not be used online and, with the country's credit card base being small, COD was often the only

option for online buyers.

• Debit cards dominate the payment cards market, accounting for 79 percent of total purchase volume in 2018. Credit cards are largely aimed at the affluent market, and a high proportion of spend takes place outside the country.
• Banks have traditionally subsidised their acquiring operations through their issuing and corporate banking businesses with MSCs often priced below interchange levels.