Electronic payments have exceeded transactions in cash for the first time in Saudi Arabia, as its percentage shot up significantly to reach 57 percent in 2021 of the total number of executed transactions, compared to 36 percent in 2019, The Saudi Central Bank (SAMA) announced.
SAMA’ announcement came while revealing a report on the results of an extended study on the use of payment methods in Saudi Arabia during 2021. The report targeted measuring and analysing the development in the share of e-payments from the total payments operations in all sectors.
SAMA said that cash is no longer the most used method of payment by individuals for the first time in the Kingdom, according to reports.
The percentage of e-payments has exceeded cash payments at the level of all sectors in addition to most of the various economic activities.
The percentage of e-payments at the level of all sectors increased to 62 percent in 2021 of the total number of executed transactions, compared to the previous year, when it stood at 44 percent. It also constituted 94 percent of the total value of these transactions.
The total cash and e-payment transactions executed in the Kingdom during 2021 recorded approximately 11.3 billion payment transactions, or 62 percent of the total executed transactions, which also includes 7 billion payment transactions. Moreover, the value of payment transactions is estimated at SR15.6 trillion.
The Middle East & North Africa Digital Payments Market is expected to grow at a CAGR of 15.39 per cent over the forecast period (2021-2026). According to a study from the London-based payment systems company, Checkout.com, stubborn cash usage could fall in the Middle Eastern region, after an acceleration in the uptake of digital payments amid the COVID-19 pandemic.
E-payments in the Business Sector
E-payments in the business sector were recorded at 84 percent in 2021 as compared to 51 percent in 2019, achieving a growth of 65 percent within two years.
E-payments constituted more than 99 percent of the total payments made by the government to the various beneficiaries.
The government sector has almost completely shifted to relying on e-payment methods to complete all the various payment processes to all beneficiaries, SAMA said. The study issued by SAMA came as part of one of the objectives of the Financial Sector Development Programme (FSDP).
The FSDP programme aimed to situate the Kingdom among the leading countries in the field of FinTech, with Riyadh becoming a global FinTech hub. The strategy also aims at enhancing economic empowerment for individuals and communities.
The FSDP programme also seeks to promote the use of digital payment solutions to transform into a cashless society, in addition to its goal to reach 70 percent of digital transactions by 2025.
In addition to being aware of solutions like cryptocurrency, digital cards, biometric payments, BNPL (Buy Now Pay Later), and open banking, consumers in the UAE are increasingly and actively using these solutions in their everyday lives.
