Overall Revenue of Payments in Saudi Arabia Expected to Increase to USD 23.7 Billion by 2030
New BCG Report Reveals National Payment Revenues in Saudi Arabia is forecasted to grow by 132% between 2020 to 2030
Riyadh, November 3, 2021 — As purchasing habits shifted almost overnight from offline to online and cash to noncash following COVID-19, the payments industry subsequently suffered an impact far less severe than initially anticipated, according to a new report by Boston Consulting Group(BCG). The report, titled Global Payments 2021: All In for Growth, sheds light on how national markets will recover over the next decade, with growth set to be driven by newfound momentum – including in the Kingdom of Saudi Arabia (KSA).
In line with findings published in BCG’s 19th annual analysis of the global payments industry, Saudi Arabia shares many commonalities with other regional and international geographies, including manageable revenue losses considering recent turbulence and optimistic projections for the future. From 2015 to 2020, national payment revenues increased by 37% to USD 10.2 billion, and they could reach USD 23.7 billion by 2030. Furthermore, Saudi Arabia has the potential to record sustained growth over the next ten years and beyond, with a forecasted compound annual growth rate of 8.8% from 2020 to 2030.
“Having evaluated the Saudi Arabian landscape, it is clear that the Kingdom’s economic rebound of late is partly due to a robust payments industry,” said Mohammad Khan, Partner, BCG. “Evolving end-user behaviors and digital channels’ continuous rise in popularity have proven to be a critical combination, instigating hastened e-commerce enablement, expanding fulfillment options, and digitizing transaction processes. And as such, the industry is now positioned for a new era of efficiency and effectiveness in the years ahead, with growth projections indicating that this scenario will indeed transpire.”
Having taken payment instruments including charge card, direct debit, cheque, high-value credit, electronic credit transfer, current account, and credit, debit, and prepaid cards into consideration, the report has revealed payments revenue and total transaction projections for the Kingdom’s payments industry. The previously mentioned USD 23.7 billion overall worth of revenue payments by 2030 represents an increase of 132% from 2020, while the number of transactions is expected to rise from approximately 2.6 billion to over 8.5 billion during the same timeframe – an increase of 227%.
“When assessing the Saudi payments industry over the next decade, heightened innovation will drive never-before-seen digital transaction numbers, with purchasing barriers being emulated on a sustained basis,” explained Markus Massi, Managing Director and Senior Partner, BCG. “This will become a reality by payments industry companies elevating service capabilities, as well as new players entering the market, which will boost competition and instigate heightened innovation. And as services become entwined with more digital ecosystems and customers avail streamlined experiences, retail is an area that will undoubtedly benefit the most.”
Over the coming years, the retail revenue of payments in Saudi Arabia is projected to witness sizeable increases. In 2020, the retail revenue of payments amounted to over USD 9 billion. However, this figure is expected to rise to approximately USD 20.6 billion by 2030 – an increase of 128% – with the number of related transactions also rising by almost 210% from 2.3 billion in 2020 to over 7.2 billion by 2030.
“For payments industry incumbents, digital onboarding and fully welcoming transformational reform will open up beneficial avenues with greater haste, including new revenue opportunities driven by customer preferences for digital transactions,” added Khan. “The payment industry’s ability to respond to unprecedented change is already evident following recent events, and players should learn from the latest trends, examine the projections, and take proactive action to prepare for further inevitable change.”
