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Market Research Report

Payments Landscape in Saudi Arabia: Opportunities and Risks to 2021

Published by GlobalData Product code 630775
Published Content info 49 Pages
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Payments Landscape in Saudi Arabia: Opportunities and Risks to 2021
Published: March 31, 2018 Content info: 49 Pages
Description

In Saudi Arabia cash remains the preferred method of consumer payment, accounting for more than 90% of the total payment transaction volume. While high-value transactions are shifting to electronic platforms, low-value transactions are mostly carried out with cash. Although the use of payment cards, primarily debit cards, is gradually rising, they are mostly used for cash withdrawals at ATMs rather than making payments at merchant outlets.

The government, however, has been taking several initiatives to promote electronic payments, one such being the introduction of the Wage Protection System regulation in September 2013. While debit cards remain the dominant payment card type, the use of credit cards remains low in Saudi Arabia for religious reasons, as Islam forbids interest. To encourage credit card use, banks are now offering Sharia-compliant credit cards in addition to regular credit cards. The gradual adoption of contactless technology, and the emergence of the e-commerce market - supported by the availability of several alternative payment methods - is likely to drive the payment card market throughout the forecast period.

To further boost electronic payments, SAMA launched a contactless payment service called Mada Atheer in November 2016, allowing Mada card holders to conduct low-value transactions by waving their card at POS terminals. In February 2018, SAMA announced its plan to extend the contactless functionality to smart devices. Consequently, in March 2018 Riyad Bank partnered with payment technology provider Gemalto to launch Saudi Arabia's first contactless payment wristband.

The growth potential in the e-commerce market has encouraged investors to set up new online platforms. In November 2016 a group of investors from the UAE, led by businessman Mohamed Alabbar and Saudi Arabia's Public Investment Fund, collectively announced the launch of Noon.com, one of the largest e-commerce platforms in the Arab world offering 20 million products. The platform was officially launched in December 2017. The rise in e-commerce transactions is further expected to drive electronic payments in the country.

The report "Payments Landscape in Saudi Arabia: Opportunities and Risks to 2021", provides top-level market analysis, information and insights into the Saudi Arabian cards and payments industry.

In depth, this report provides the following -

  • Current and forecast values for each market in the Saudi Arabian cards and payments industry, including debit, credit, and charge cards.
  • Detailed insights into payment instruments including cash, payment cards, credit transfers, cheques, and direct debit. It also, includes an overview of the country's key alternative payment instrument.
  • E-commerce market analysis.
  • Analysis of various market drivers and regulations governing the Saudi Arabian cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards.

Companies mentioned in this report: Al Rajhi Bank, The National Commercial Bank, Riyad Bank, Arab National Bank, Saudi British Bank, Samba Financial Group, Banque Saudi Fransi, Bank AlJazira, Alawwal Bank, Mada, Visa, Mastercard, and American Express

Scope

  • The gradual adoption of contactless payments is fostering the use of payment cards at the POS. Riyad Bank launched the country's first contactless card in September 2015, transforming its entire card portfolio to contactless technology. In addition, in April 2016 National Commercial Bank (NCB) transferred its entire credit card portfolio to contactless technology. To further boost electronic payments, SAMA launched a contactless payment service called Mada Atheer in November 2016, allowing Mada card holders to conduct low-value transactions by waving their card at POS terminals. In February 2018, SAMA announced its plan to extend the contactless functionality to smart devices. Consequently, in March 2018 Riyad Bank partnered with payment technology provider Gemalto to launch Saudi Arabia's first contactless payment wristband.
  • To provide convenient payments for online transactions, in April 2016 SAMA introduced an e-payment service called the SADAD Account, providing a direct link between bank accounts and online merchants. The service enables consumers to facilitate online payments by directly debiting their SADAD Account and transferring the amount to the merchant's account. Upon opening a SADAD Account with a participating bank, consumers are provided with a username and password that can be used when shopping at member stores. Banks including NCB, Samba Financial Group, Riyad Bank, Saudi British Bank, AlJazira Bank, Al Rajhi Bank, Arab National Bank, Saudi Investment Bank, and Banque Saudi Fransi currently offer the service.
  • The growth potential in the e-commerce market has encouraged investors to set up new online platforms. In November 2016 a group of investors from the UAE, led by businessman Mohamed Alabbar and Saudi Arabia's Public Investment Fund, collectively announced the launch of Noon.com, one of the largest e-commerce platforms in the Arab world offering 20 million products. The platform was officially launched in December 2017. The rise in e-commerce transactions is expected to drive electronic payments in the country.

Reasons to buy

  • Make strategic business decisions, using top-level historic and forecast market data, related to the Saudi Arabian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Saudi Arabian cards and payments industry.
  • Assess the competitive dynamics in the Saudi Arabian cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Saudi Arabia.
  • Gain insights into key regulations governing the Saudi Arabian cards and payments industry.
Table of Contents
Product Code: FS0121CI

Table of Contents

  • Market Overview
  • Executive Summary
  • Card-based Payments
  • E-commerce Payments
  • Alternative Payments
  • Payments Infrastructure & Regulation
  • Appendix
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