Things to Know About Digital Payments in Saudi Arabia

Things to Know About Digital Payments in Saudi Arabia

Contributed by Ahmad Yaacoub, Country Head for Saudi Arabia (KSA), Thunes

Saudi Arabia lies at the convergence of Europe, Asia and Africa, occupying most of the Arabian Peninsula between the Red Sea and the Persian Gulf. This vast Kingdom – roughly four times the size of France – was the crossroads of the ancient world, with some of the world’s oldest trade routes passing through its lands.

Fast forward to the present day, and Saudi Arabia is aiming to become a major hub for international trade again, built on the back of digital technology this time rather than camel trains. It’s a move designed to make the country less reliant on oil revenues. 

Given global climate goals and the oil industry’s uncertain long-term outlook, the Saudi government is pushing ahead with diversification to build a more sustainable future for the nation. This economic and social transformation is outlined in the Kingdom’s “Vision 2030” blueprint.

Cashless Kingdom

A core aim of Vision 2030 is to accelerate Saudi Arabia’s digital economy and increase cashless transactions to 70% by 2025. Deep cultural traditions, particularly among shoppers and traders in local markets and souqs, meant that until recently, Saudi remained largely a cash society. And, like many other parts of the Middle East, consumers and merchants generally distrusted banking systems and other bodies handling their money. Their hesitancy to conduct online transactions or pay with debit or credit cards was partly due to a perceived lack of regulation and financial infrastructure within the region to protect them and a lack of card acceptance knowledge.

Saudi Arabia’s youthful, mobile-first society – one of the most digitally-savvy in the world – is contributing to a rapid change in payment preferences. Two-thirds of Saudi Arabia’s population is under the age of 35, and Saudi Arabia ranks third globally in smartphone usage at 24.2m users, with almost three-quarters of the population using smartphones. In 2021, electronic payments overtook cash as the Kingdom’s most common payment method for the first time, according to a recent study by the Saudi Central Bank (SAMA).

Digital banking

Even before the pandemic, we saw rapid adoption of digital payments, with card payments in Saudi Arabia soaring over 70% between February 2019 and January 2020. Covid-19 turbo-charged the uptake, with digital payments jumping 75% and cash withdrawals dropping by a third in 2020. 

New digital banks are expanding fast, with Saudi Arabia’s Sovereign Fund PIF backing the latest entrant to the market, D360, earlier this year. This launch coincided with cuts in the traditional banking sector in the face of growing digitisation, with 13 bank branches and 81 ATMs closing in the first quarter of 2022. Traditional banks face multiple technical challenges moving from conventional methods and channels and adapting to new technology.

The mada Pay mobile application supports the move to cashless payments and enables contactless payments using a smartphone.

Mobile wallets

According to research by McKinsey, digital wallets will be the most influential digital payment method in MENA in the next five years. With internet penetration forecast to reach 97% by 2025 and new laws making it mandatory for every small shop to accept card payments and use POS devices, the move to cashless is guaranteed to gather further momentum. Major players in the digital wallet space include STC Pay and urpay.


Saudi Arabia’s e-commerce growth is unprecedented. The sector’s market value is forecast to exceed US$13.2 billion (SAR 50 billion) by 2025, according to a Boston Consulting Group report, following a 60% surge during 2019-2020. At the same time, in 2020, online sales in Saudi Arabia accounted for approximately 8% of total retail sales compared to 18% worldwide, suggesting tremendous untapped potential remains in the market. 

Prior to Covid-19, 57% consumers in Saudi Arabia preferred cash-on-delivery (COD) payments for e-commerce transactions as there was a slow credit card penetration rate. The impact of the pandemic has accelerated change. According to a Statista report in 2021, around 95% of customers in Saudi Arabia had considered different payment options for online purchases such as cryptocurrencies, digital wallet and electronic payments, and over half of customers avoided companies that don’t offer online payments.

Buy Now Pay Later

Demand for Buy Now Pay Later (BNPL) solutions is strengthening, with Saudi merchants enjoying an increased basket size per customer of up to 10x versus the high-interest rates of traditional lending solutions. The streamlined customer experience sees a card issued with a credit limit, and once it’s tapped and paid, the instalment payments process starts.

Popular BNPL platforms such as Tabby, Tamara and Spotii are starting to shift beyond simply offering instalment plans for nice-to-have products such as fashion items to paying for actual needs such as insurance plans.

Cross-border payments

Cross-border payments are hugely important in Saudi Arabia, one of the world’s largest remittance corridors. Record sums – well over US$40 billion – are expected to be sent home by migrant workers from Saudi Arabia this year. Demand for easy and affordable cross-border payment methods is soaring.


The Kingdom’s business-friendly, digital-first initiatives have increased the number of fintechs, broadening access to digital financial tools. The Ministry of Finance recently announced a new strategy to increase the number of fintech firms threefold from 82 to 230 by 2025. New fintech startups will provide a wide range of services to private, corporate, and governmental partners.


Saudi Arabia’s international trade continues to expand year on year, with “Vision 2030” set to give it a further digitally-driven boost. Digital payments infrastructure players such as Thunes and advanced technology capabilities will support this booming digital economy. Advanced cloud-based Payments solutions can help digital wallets, banks, money transfer operators and superapps integrate easy and reliable real-time  remittances, connecting the Saudi community with the rest of the world. This will empower local merchants and burgeoning Shopify businesses seeking international growth as they’ll be able to get paid quickly and easily anywhere in the world at a very low cost.

Ultimately, we believe that access to digital technologies and robust infrastructure are vital for the digital transformation of the Kingdom of Saudi Arabia, as well as any other aspiring digital economy. And Thunes’ solutions are able to address many of the challenges of growing business that are going through the rapid development stages. 

If you’d like to learn more about Thunes capabilities, get in touch with Ahmad Yaacoub, or one of the Thunes team members in your region.

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