Saudi Arabia winning the race to become a cashless society 
The Saudi Central Bank announced that the share of retail consumer electronic payments, one of the key performance indicators for the Financial Sector Development Program, reached 70 percent of total retail payments in 2023, up from 62 percent in 2022.
SAMA noted that this achievement is due to the significant growth in payments processed through the national payment systems in 2023.
The number of payments processed reached 10.8 billion transactions in 2023, compared with 8.7 billion in 2022, a 24 percent increase.
In recent years, the Kingdom has experienced rapid growth in the adoption of electronic payments, thanks to an integrated, strategic, and collaborative approach across the financial community.
Moreover, the evolving cost-effective and reliable e-payment system has improved transaction efficiency and contributed to financial stability.
The Financial Sector Development Program, one of the key programs of the Kingdom’s Vision 2030, launched in 2018, has played a crucial role in shaping the future of the financial sector in Saudi Arabia.
SAMA has played a major role in encouraging financial institutions under its supervision, such as banks, to offer various electronic payment options and channels for their customers. This aligns with Vision 2030, which aims to transform Saudi Arabia into a cashless society.
The central bank has collaborated with the Financial Sector Development Program to achieve these significant milestones by supporting the banking sector in providing banking services that are digitally more accessible to customers.
I believe that Saudi Arabia is on the verge of achieving its goal of transitioning to a cashless society, especially since 70 percent of total retail payments was reached in 2023, well ahead of the 2025 target.
Additionally, Saudi Payments, a wholly owned subsidiary of SAMA, is mandated to continue SAMA’s legacy by developing a secure, interoperable national payment infrastructure. This infrastructure serves banks and fintech companies while providing the required standardization to ensure all providers have a level playing field.
Several national payment schemes in Saudi Arabia have enabled electronic payments to flourish through various channels and options.
Mada is one of Saudi Arabia’s national payment schemes that facilitates electronic payments through various channels, including point-of-sale terminals, SoftPOS, ATMs, and e-commerce websites across the Kingdom, through a central payment system that re-routes financial transactions performed with issuer cards.
The number of POS terminals has increased from about 438,000 in 2019 to more than 1.7 million in 2023, a 300 percent increase.
The value of sales performed through POS amounted to SR615 billion ($164 billion) in 2023, compared with SR288 billion in 2019, an increase of 113.4 percent. Meanwhile, the number of transactions has grown by 453 percent.
More than 31.5 million ATM cards were issued in 2019, a figure that grew to more than 47.7 million in 2023, a growth of 51 percent.
Saudi banks have played a prominent role in driving the growth of electronic payments by introducing several electronic payment options and channels to their customers, such as points of sale, Mada, and Internet banking.
Banks have invested significantly in technology to provide their customers with a wide range of electronic financial products and services.
The sharp rise in electronic payments in the Kingdom has been significantly supported by individuals’ preference for digital and electronic channels.
I believe that Saudi Arabia is on the verge of achieving its goal of transitioning to a cashless society, especially since 70 percent of total retail payments was reached in 2023, well ahead of the 2025 target.
• Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
