The Cards and Payments Industry in Saudi Arabia: Emerging trends and opportunities to 2020

  • ID: 3772335
  • Report
  • Region: Saudi Arabia
  • 53 pages
  • GlobalData
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FEATURED COMPANIES

  • Al Rajhi Bank
  • American Express
  • Arab National Bank
  • Mastercard
  • National Commercial Bank
  • Riyad Bank
  • MORE
The Cards and Payments Industry in Saudi Arabia: Emerging trends and opportunities to 2020

Summary:

Saudi Arabia is a cash-dominated society, as cash remains the preferred mode of consumer payments accounting for 92.4% 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 is on rise, they are mostly used for cash withdrawals at ATMs rather than making payments at merchant outlets. The average annual spend per card in Saudi Arabia stood at US$2,478.40 - much lower than neighboring Israel (US$8,025.70), Kuwait (US$6,376.20), and the UAE (US$3,729).

Saudi Payments Network interlinks all ATMs and POS terminals across the country by providing authorization, routing, and clearing services. The Saudi Arabian Monetary Agency (SAMA) launched its modified electronic payment system Mada in September 2015. To increase the penetration of debit cards, Mada cards are issued by local banks. These cards can be used across all ATMs and POS terminals operated by local banks in the country. Since they are co-badged, the debit cards can be used internationally with other payment systems such as GCC Net, Visa, Mastercard, and American Express.

Like all Middle Eastern countries, the use of credit cards remains low in Saudi Arabia for religious reasons, as Islam forbids the receipt or payment of interest. To combat this and infuse credit card penetration in the country, banks have started to offer a wider range of Sharia-compliant credit cards. Almost all leading credit card issuers in the country now offer Sharia-compliant credit cards. Furthermore, banks and credit card issuers are using promotional offers to encourage credit card use.

Contactless technology is slowly being adopted in Saudi Arabia, aided by government initiatives. In September 2015 Riyad Bank launched the country’s first contactless cards, and took the initiative to transform its entire card portfolio to contactless technology. SAMA launched a contactless payment service called Mada Atheer in November 2016 that allows Mada card holders to conduct low-value transactions by waving the card at POS terminals. In April 2016, the National Commercial Bank (NCB) transferred its entire credit card portfolio to contactless technology. Other banks and card issuers are anticipated to follow the same pattern over the forecast period.

The value of e-commerce transactions has grown rapidly in Saudi Arabia, increasing from US$1.0bn (SAR3.8bn) in 2012 to US$3.5bn (SAR13.3bn) in 2016 (36.47% CAGR). This growth was assisted by the rise in internet penetration. The government has also been taking steps to develop the e-commerce market. The Ministry of Commerce and Investment introduced the first draft of the E-Commerce Law in February 2015 to increase the competitiveness in the e-commerce market, as well as to enhance customers’ trust in online purchases.

The report 'The Cards and Payments Industry in Saudi Arabia: Emerging trends and opportunities to 2020' provides top-level market analysis, information and insights into the Saudi cards and payments industry.

Furthermore, it provides the following:
  • Current and forecast values for each market in the Saudi cards and payments industry, including debit, credit, and charge cards.
  • Detailed insights into payment instruments including credit transfers, cheques, cash, direct debit, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis.
  • Analysis of various market drivers and regulations governing the Saudi 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, National Commercial Bank, Riyad Bank, Arab National Bank, Saudi British Bank, Samba Financial Group, Visa, Mastercard, American Express.

Scope:
  • To encourage electronic payments, SAMA has taken a number of initiatives, including establishing a new electronic payment system called Mada and introducing mandatory wage payments into bank accounts. It launched a modified payments network in September 2015 linking all ATMs and point-of-sale (POS) terminals across the country to a central payment switch, with the aim of boosting electronic payments. To encourage the use of POS terminals, the daily purchase limit per card was increased from $5,333 (SAR20,000) to $15,998 (SAR60,000). Moreover, Mada card users can receive a maximum of $106.70 (SAR400) cashback from merchants per day on each card.
  • To drive contactless payments, SAMA launched a contactless payment service called Mada Atheer in November 2016. The service permits Mada card holders to conduct low-value transactions by waving the card at POS terminals. During the trial conducted from January 2016 750,000 Mada Atheer-enabled Mada cards were issued and more than 50,000 Atheer-supporting POS terminals were launched in Saudi Arabia.
  • 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 banks 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. At the time of writing NCB, Samba Financial Group, Riyad Bank, Saudi British Bank (SABB), AlJazira Bank, Al Rajhi Bank, Arab National Bank (ANB), and Saudi Investment Bank (SAIB) are offering the service.
Reasons to Buy:
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Saudi cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Saudi cards and payments industry.
  • Assess the competitive dynamics in the Saudi 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 cards and payments industry.
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Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Al Rajhi Bank
  • American Express
  • Arab National Bank
  • Mastercard
  • National Commercial Bank
  • Riyad Bank
  • MORE
EXECUTIVE SUMMARY
1.1. Market overview
1.2. Key facts
1.3. Top five industry events

2. PAYMENT INSTRUMENTS
2.1. Current payment environment

3. E-COMMERCE AND ALTERNATIVE PAYMENTS
3.1. E-commerce market analysis
3.2. Alternative payment solutions
3.2.1. PayPal
3.2.2. PayFort
3.2.3. Boku
3.2.4. Paysafecard
3.2.5. Bango
3.2.6. T-Pay
3.2.7. M-Pesa

4. REGULATIONS IN THE CARDS AND PAYMENTS INDUSTRY
4.1. Regulatory framework
4.1.1. Payment systems
4.1.2. The Wage Protection Law
4.2. Anti-money laundering
4.3. Foreign direct investment (FDI) regulations

5. ANALYSIS OF CARDS AND PAYMENTS INDUSTRY DRIVERS

6. PAYMENT CARDS

7. DEBIT CARDS
7.1. Debit cards market analysis
7.2. Competition in the debit cards market
7.3. Debit card comparison

8. PAY-LATER CARDS
8.1. Pay-later cards market analysis
8.2. Competition in the pay-later cards market
8.3. Pay-later cards comparison

9. APPENDIX
9.1. Abbreviations and acronyms
9.2. Supplementary data
9.3. Definitions
9.4. Methodology
9.5. Bibliography
9.6. Further reading

List of Tables:
Table 1: Saudi Arabia: key facts, 2016
Table 2: Saudi Arabia: regional benchmarking of payment cards, 2016
Table 3: Saudi Arabia: mode of entry of foreign banks
Table 4: Saudi Arabia: debit card comparison and key features, 2016
Table 5: Saudi Arabia: Gold credit cards comparison and key features, 2016
Table 6: Saudi Arabia: Premium credit cards comparison and key features, 2016
Table 7: Saudi Arabia: charge credit cards comparison and key features, 2016
Table 8: Saudi Arabia: payment instrument transaction values (SARbn), 2012-16
Table 9: Saudi Arabia: payment instrument transaction values ($bn), 2012-16
Table 10: Saudi Arabia: payment instrument transaction volumes (millions), 2012-16
Table 11: Saudi Arabia: payment cards in circulation by type (millions), 2012-20f
Table 12: Saudi Arabia: volume of payment card transactions (millions), 2012-20f
Table 13: Saudi Arabia: value of payment card transactions (SARbn), 2012-20f
Table 14: Saudi Arabia: value of payment card transactions ($bn), 2012-20f
Table 15: Saudi Arabia: debit cards in circulation (millions), 2012-20f
Table 16: Saudi Arabia: debit card transaction volumes, 2012-20f
Table 17: Saudi Arabia: debit card transaction values (SAR), 2012-20f
Table 18: Saudi Arabia: debit card transaction values ($), 2012-20f
Table 19: Saudi Arabia: debit cards in circulation by scheme (millions), 2012-16
Table 20: Saudi Arabia: debit card transaction values by scheme (SARbn), 2012-16
Table 21: Saudi Arabia: debit card transaction values by scheme ($bn), 2012-16
Table 22: Saudi Arabia: debit card transaction values by issuer (SARbn), 2012-16
Table 23: Saudi Arabia: debit card transaction values by issuer ($bn), 2012-16
Table 24: Saudi Arabia: pay-later cards in circulation (millions), 2012-20f
Table 25: Saudi Arabia: pay-later card transaction volumes, 2012-20f
Table 26: Saudi Arabia: pay-later card transaction values (SAR), 2012-20f
Table 27: Saudi Arabia: pay-later card transaction values ($), 2012-20f
Table 28: Saudi Arabia: pay-later cards in circulation by scheme (000s), 2012-16
Table 29: Saudi Arabia: pay-later card transaction values by scheme (SARbn), 2012-16
Table 30: Saudi Arabia: pay-later card transaction values by scheme ($bn), 2012-16
Table 31: Saudi Arabia: pay-later card transaction values by issuer (SARm), 2012-16
Table 32: Saudi Arabia: pay-later card transaction values by issuer ($m), 2012-16
Table 33: Saudi Arabia: credit cards in circulation (millions), 2012-20f
Table 34: Saudi Arabia: credit card transaction volumes, 2012-20f
Table 35: Saudi Arabia: credit card transaction values (SAR), 2012-20f
Table 36: Saudi Arabia: credit card transaction values ($), 2012-20f
Table 37: Saudi Arabia: credit cards in circulation by scheme (000s), 2012-16
Table 38: Saudi Arabia: credit card transaction values by scheme (SARbn), 2012-16
Table 39: Saudi Arabia: credit card transaction values by scheme ($bn), 2012-16
Table 40: Saudi Arabia: charge cards in circulation (000s), 2012-20f
Table 41: Saudi Arabia: charge card transaction volumes, 2012-20f
Table 42: Saudi Arabia: charge card transaction values (SAR), 2012-20f
Table 43: Saudi Arabia: charge card transaction values ($), 2012-20f
Table 44: Saudi Arabia: charge cards in circulation by scheme (000s), 2012-16
Table 45: Saudi Arabia: charge card transaction values by scheme (SARm), 2012-16
Table 46: Saudi Arabia: charge card transaction values by scheme ($m), 2012-16
Table 47: Key definitions

List of Figures:
Figure 1: Saudi Arabia: payment instrument shares by transaction value (%), 2012 vs 2016
Figure 2: Saudi Arabia: payment instrument shares by transaction volume (%), 2012 vs 2016
Figure 3: Saudi Arabia: e-commerce market value, 2012-20f
Figure 4: Saudi Arabia: population and economic indicators
Figure 5: Saudi Arabia: ATMs, POS terminals and household consumption
Figure 6: Saudi Arabia: payment cards transaction value and cards in circulation, 2012-20f
Figure 7: Saudi Arabia: debit card penetration and turnover per card
Figure 8: Saudi Arabia: debit cards scheme and issuer transaction value share, 2016
Figure 9: Saudi Arabia: pay-later card penetration and turnover per card
Figure 10: Saudi Arabia: pay-later cards scheme and issuer transaction value share,
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  • Al Rajhi Bank
  • National Commercial Bank
  • Riyad Bank
  • Arab National Bank
  • Saudi British Bank
  • Samba Financial Group
  • Visa
  • Mastercard
  • American Express
Note: Product cover images may vary from those shown
5 of 5
Note: Product cover images may vary from those shown
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