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 Saudi Arabia's payments infrastructure, digital and mobile payments developments, demographic and consumer trends, regulatory drivers, credit card profitability, and more.
Demographics and the economy
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Card Payments Data
Appendix I: Demographics and economy
Appendix II: Payments environment
Appendix III: Cards market
Appendix IV: Mobile payments
Appendix V: Profit pool
Appendix VI: The networks
Appendix VII: Retail banks and issuers
Appendix VIII: Acquiring and processing
Appendix IX: Online acquiring
Demographics and Economy:
Nearly 13 million expatriates live and work in Saudi Arabia, making it the third-largest country in terms of expatriate population after the United States and Russia.
Traditionally Saudi Arabia has been a cash-reliant market: this dominance has extended into the rapidly developing e-commerce sector as cash-on-delivery is the preferred payment method. However, the authorities are determined to change this situation.
Saudi Arabia differs from most Gulf countries in that debit cards are more widespread and more used for payments than credit cards. Debit cards were used for around 80% of card purchases in 2018.
In July 2018 Mada launched the first significant mobile payments service in the country, Mada Pay. Mada Pay facilitates NFC mobile payments on Android phones. It supports Mada, Visa and Mastercard cards issued by supporting banks.
Saudi Arabia's credit cards industry is highly profitable and is one of the few global markets with a profit per card greater than $100. There has been a move towards Premium cards as issuers have concentrated more on affluent customers who are high spending and less risky.
Saudi Arabia has a competitive credit cards market, with three of the major international brands – Visa, Mastercard and American Express – having a presence. American Express has a market share of 3.5% of cards in issue but has the highest average billed volume per credit card in Saudi Arabia.
Key Retail Banks and Issuers:
28 banks were licensed to provide banking services in Saudi Arabia as of the end of 2018. The country's retail banking market is dominated by the 12 local banks: the five largest banks collectively held 74% of total bank branches.
Acquiring and Processing:
Merchant acquiring operations are heavily subsidised by the banks' credit card issuing business and corporate banking business. Banks typically offer competitive rates, which in some instances are below cost, on merchant acquiring.
E-commerce in Saudi Arabia is in € its early stages of development but is rapidly expanding. Online sales represent approximately 0.8% of total retail sales in the country, but this is also expected to increase.
Regulatory and Markets Information:
A Value-Added Tax of 5% on all goods and services came into force at the beginning of 2018 to boost non-oil income and address yawning fiscal deficits caused by years of low oil prices. The measure ends decades of tax-free living for residents and most businesses.
Verisk reports deliver market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit throughout the Middle East. Analysts use both primary and secondary source data and conduct in-depth interviews with senior industry executives and Middle East experts.
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