This growth aligns with Saudi Arabia's Vision 2030 initiative, which aims to modernise the economy and reduce reliance on cash transactions. The government's target is to achieve 70% non-cash retail transactions by 2030, fostering a cashless society. The Saudi Payments Network , established by SAMA, has been instrumental in this transformation, introducing services like Mada Atheer for contactless payments and Mada Pay for mobile transactions.
The payments landscape in Saudi Arabia is projected to expand significantly, with market value expected to grow from $163.93 billion in 2024 to $269.91 billion by 2029, reflecting a compound annual growth rate of 10.49%. This expansion is driven by innovative payment solutions and strategic collaborations between financial institutions and fintech companies. For instance, Mastercard's partnership with digital payments firm Loop aims to enhance credit card offerings and payment solutions across the Kingdom.
The surge in credit card lending is also attributed to the increasing adoption of digital banking and fintech services. The Saudi Fintech Strategy encourages the entry of digital-only banks and fintech firms, offering innovative lending solutions tailored to a tech-savvy population. In 2023, Mastercard Gateway processed over 950 million payments in Saudi Arabia, supporting the growth of digital commerce in the market.
Government initiatives have played a crucial role in this digital transformation. The Saudi Central Bank's introduction of services like Mada Atheer and the launch of Apple Pay and Mada Pay have bolstered the digital payments infrastructure. Additionally, the Financial Sector Development Program under Vision 2030 aims to diversify the economy, promote financial inclusion, and foster innovation in the financial sector.
The number of financial cards in circulation is set to increase further, alongside growth in the number of transactions. This rise in card payments is a direct result of the government's push towards a cashless society, encouraging consumers to transition from cash to electronic payment solutions. While cash has traditionally been the preferred payment method, its use is on the decline as more consumers shift to financial cards for their transactions.
The cumulative loan portfolio in Saudi Arabia's lending market is expected to reach SR2.95 trillion by 2029, driven by government initiatives such as Vision 2030 and the FSDP. These programs aim to diversify the economy, promote financial inclusion, and foster innovation in the financial sector. The market's vitality is a testament to the innovative and responsive payment solutions being deployed to meet customer demands and support the country's transition to a less cash-dependent society.