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Saudi Arabia Country Report

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  • Published Date: June 2021

A comprehensive analysis of the cards, payments and consumer banking market in Saudi Arabia, with acute commentary backed by deep data.
The speed of development in the Saudi Arabia card payments market is striking. Since our last update, faster payments, mobile payments and BNPL have all been introduced, e-commerce has soared, fintechs have been licensed, neobanks have started up and cash usage has continued its downward trend.
A sizeable population of young and internet-savvy consumers means untapped opportunities are growing fast: credit-card, mobile-payment and instalment-financing market positions are all there for the taking by forward-thinking entrants mindful of local customs.

This is what you will learn from this report:

How the financial sector is being radically transformed.
Why cash is unlikely to regain its lead over cards.
What the new ATM/POS system makes possible.
Why cash-on-delivery has tumbled.
Which revenue streams are most profitable.

Saudi Arabia Cards and Payments Market | Key Facts

  • Saudi Arabia's payments market is developing rapidly. New payments infrastructure and more open regulation have sparked the fintech sector and consumers are turning away from cash towards cards and mobile payments.
  • An entire programme of the ongoing Vision 2030 policy drive is devoted to the development of the financial sector, with the progress made towards a cashless society touted as the top achievement on that front so far.
  • In 2020, the central bank introduced additional licensing guidelines for digital-only banks in an effort to build out a more robust regulatory framework for its fintech ecosystem.
  • At around 80 percent in 2020, the level of bank account penetration here is among the highest in the region.
  • In 2020 the kingdom took first place globally for 5G speed and fifth place globally for average internet speeds.
  • The number of POS terminals has more than trebled since 2015, of which almost all are now contactless.
  • Cash and cards are the most popular payment methods, with the latter overtaking the former in 2020, a year in which the contactless limit increased to $80.
  • Debit card POS usage is growing rapidly, with purchase volume surpassing the value of ATM withdrawals for the first time in 2020.
  • By the third quarter of 2020, mobile payments accounted for a quarter of transactions at the point of sale, almost five times what it had been the year before.
  • A historic banking merger between NCB and Samba is creating the country's largest banking entity: Saudi National Bank.

Saudi Arabia Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Saudi Arabia Payments Data Tables

Appendix I: Demographics and the economy

Demographic and economic indicators
Data table 1: Demographic and economic indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Estimates and forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Estimates and forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates and forecasts to 2022.
Data table 5: Account penetration: 2015-2020. Estimates and forecasts to 2024.
Data table 6: Consumer payment trends: 2015-2020. Estimates and forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Estimates and forecasts to 2022.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 15: Pre-paid/e-money card metrics: 2015-2020. Estimates and forecasts to 2024.

Appendix IV: Mobile payments

Data table 16: Mobile proximity payment metrics: 2018-2020. Estimates and forecasts to 2024.
Data table 17: Mobile P2P payments: Estimates and forecasts 2021-2024.

Appendix V: Profit pool

Data table 18: Saudi Arabia profit pool: 2015-2020. Estimates and forecasts to 2024 inc. credit card numbers, billed volumes, oustandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 19: Networks' credit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 20: Networks' credit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 21: Networks' credit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 22: Networks' number of credit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 23: Networks' average credit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 24: Credit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.
Data table 25: Networks' debit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 26: Networks' debit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 27: Networks' debit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 28: Networks' number of debit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 29: Networks' average debit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 30: Debit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.

Appendix VI1: Key retail banks and issuers

Data table 31: Key credit card issuers market shares by credit card numbers: 2016-2020. Estimates for 2021.
Data table 32: Key issuers market shares in credit card outstandings: 2016-2020. Estimates for 2021.
Data table 33: Key debit card issuers market shares by debit card numbers: 2016-2020. Estimates for 2021.

Appendix VIII: Acquirers and processing

Data table 34: Merchant acquirer credit card market share: Estimates for 2021.
Data table 35: Credit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 36: Merchant acquirer debit card market share: Estimates for 2021.
Data table 37: Debit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 38: Credit card issuer/issuing processor relationships
Data table 39: Credit card acquirer/acquiring processor relationships
Data table 40: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 41: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix IX: Online acquiring

Data table 42: Online merchant acquirer market share. Estimates for 2021.

Saudi Arabia Country Report | Selected Extracts

This report examines how Saudi Arabia's payments market is developing so quickly. A new payments infrastructure and more open regulation have boosted the fintech sector and prompted consumers to drop cash payments for cards and mobile transactions. In 2020, the central bank introduced licensing guidelines for digital-only banks in a bid to build a more robust regulatory framework for the country's fintech sector. And much of Saudi's ongoing Vision 2030 policy drive is focussed on its financial sector, with the progress towards a cashless society high on the agenda.

Demographics and Economy
Roughly ten million expatriates live and work in Saudi Arabia, making it one of the largest in terms of the expatriate population alongside the UAE, US, India and Russia.

Payments Environment
The Saudi authorities want to reach a digital payment target of 70% of all transactions by 2030 which seems increasingly likely if current growth trajectories are maintained.

Payment Cards Market
Saudi Arabia differs from most Gulf countries in that debit cards are more widespread and more used for payments than credit cards. Of the total cards in issue in the country, debit cards account for 88%. They also account for 83% of purchase volume.

Mobile Payments
Mobile payments were late to arrive in Saudi Arabia, partly due to the fact that contactless technology was officially launched only in late 2016, however, the kingdom and its young, tech-savvy population are wasting no time in catching up.

Profit Pool
Saudi Arabia's credit cards industry is highly profitable with a profit per card of close to $100 according to Verisk Financial Research's profit pool model.

Card Networks
Saudi Arabia has a competitive credit cards market, with three of the major international brands – Visa, Mastercard and American Express – having a presence. Although debit cards issued by banks are branded as either Visa or Mastercard, all domestic debit card ATM and POS transactions are channelled through the local switch: Mada.

Key Retail Banks and Issuers
A total of 30 retail banks are licensed by the central bank, of which 13 are local banks and the remainder branches of foreign banks. The country's retail banking market is dominated by the five largest banks, which collectively held 73% of the credit cards in issue in 2020.

Acquiring and Processing
Merchant-acquiring operations are heavily subsidised by the banks' credit card issuing and corporate banking business. Most banks in the country outsource issuing and acquiring processing to specialist providers.

Online Acquiring
Overall the Gulf region, and particularly Saudi, is ripe for e-commerce and m-commerce expansion: high disposable incomes, deep internet penetration, enthusiastic uptake of smartphones and a young population provides all of the ingredients required for a healthy e-commerce market.

Regulatory and Markets Information
Supervised by the central bank, the Saudi Credit Bureau began operations in 2004. Known as SIMAH, it provides consumer credit information to its members in the kingdom. The establishment of SIMAH has played a significant role in assessing credit risks for individual borrowers.

Saudi Arabia Payments Report | Entities Referenced

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AFS
Al Rajhi Bank
Alawwal Bank
Alinma Bank
Amazon
American Express
ANB
Apple Pay
Arab Bank
Arab Financial Services
Arab National Bank
Bank Al Bilad
Bank AlJazira
Bank of China
Banque Saudi Fransi
BayanPay
BinDawood Holding
British Bank of the Middle East
CCAvenue
CDSI
Central Department of Statistics and Information
CITC
Citibank
Communications and Information Technology Commission
Council of Economic and Development Affairs
eBay
Financial Sector Development Program
Fiserv
GCC
Geidea
General Organisation for Social Insurance
Gulf Cooperation Council
Gulf International Bank
Hala
Haraj
HPS
HSBC
HyperPay
IBM
IMF
International Monetary Fund
International Telecommunication Union
ITU
JCB
KAEC
King Abdullah Economic City
Mada
Mada Atheer
Mada Pay
Mastercard
Moarif
Morgan Stanley Capital International
Moyasar
MSCI
Naqd
National Commercial Bank
NatWest Group
NCB
Neom
Noon.com
Payfort
Paymob
PayTabs
Riyad Bank
RuPay
SABB
SADAD
SAIB
SAMA
Samba
SARIE
Saudi Arabian Monetary Authority
Saudi Arabian Riyal Interbank Express
Saudi British Bank
Saudi Central Bank
Saudi Credit Bureau
Saudi Investment Bank
Saudi National Bank
Saudi Payments
Saudi Payments Network
Saudi Telecom
SIMAH
SNB
Souq
SPAN
SPAN 2
Standard Chartered Bank
STC Pay
Tadawul
Tamara
Tap
Telr
Trade Bank of Iraq
TSYS
Tweeq
Visa
Vision 2030
Vocalink
Wage Protection System
Western Union
World Bank
WPS

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