Cash usage is declining worldwide, with digital wallets, credit and debit cards, and buy-now-pay-later solutions slowly replacing physical money. The
to reach around 11.95 trillion U.S. dollars by 2025. Saudi Arabia is following the global trend, with
witnessing a decline in 2023 compared to 2019. While cash has usually been the preferred payment method in Saudi Arabia, its usage decline is in line with the rising consumer preference for electronic payments. The increasing preference for contactless payments at retail stores is among the key drivers of the payment card market growth.
Digital payments market
The pandemic changed Saudi consumers’ preferences regarding payments, with many preferring contactless payments supported by an improved payment infrastructure. Around 30 percent of consumers surveyed stated they had used less cash during the year, while almost 90 percent used an
emerging payment method, such as tappable smartphone wallets or money transfer apps. This trend is supported by the Saudi government’s goal to reduce the country’s dependence on cash and promote electronic payments. The Kingdom’s Vision 2030 plan aims to reduce cash transactions and increase the share of electronic payments to 70 percent of all transactions by 2025, which will benefit debit and credit card adoption and usage rates. By 2025,
Saudi Arabia’s credit card penetration rate is expected to reach around 27.7 percent.
BNPL in Saudi Arabia
The buy now, pay later (BNPL) model is witnessing fast growth, although it is still in its early stages. In 2022,
the market share of BNPL in domestic e-commerce payments in Saudi Arabia was less than the global average. BNPL providers in the Kingdom include Tabby, Spotii, Madfuu, MIS forward, Saudi’s Tamara, and Kadi Pay, which was recently permitted to offer BNPL solutions. Around 2.8 percent of
websites offered Klarna as a BNPL solution. The BNPL segment is forecasted to continue growing in the e-commerce sector.
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