Saudi Arabia is among the top markets globally for contactless payment adoption
Saudi Arabia is among the top markets globally for contactless payment adoption, with nine in 10 transactions made with contactless cards or devices throughout the Kingdom, according to digital payments giant Visa.
In line with Saudi Vision 2030’s goal to reduce the country’s reliance on cash, Saudi Arabia has made great strides in near-field communication adoption, Visa’s General Manager for GCC cluster Saudi Arabia, Bahrain and Oman Ali Bailoun told Al Arabiya English.
“The Kingdom has taken important steps in introducing new and different payment methods – enabling popular technologies such as Apple Pay and online debit card payments that were not possible before,” said Bailoun.
“A Visa study in collaboration with Saudi Payments found that contactless payments adoption in Saudi Arabia grew from 4 percent in 2017 to 94 percent at the end of 2020, placing [the Kingdom] first overall in MENA and globally above the EU average and ahead of Hong Kong and Canada. And this is no surprise given that nine out 10 transactions in Saudi are made with contactless cards or devices,” he added.
Since the onset of the COVID-19 pandemic in 2020, ecommerce has become a lifeline for consumers, according to the GM.
When asked about his observations regarding Saudi consumer behavior, and how it differs from the rest of the GCC countries, Bailoun noted the quick uptake in contactless and online payment methods by Saudi businesses and consumers alike.
“The pandemic has only given more than one compelling reason to adopt contactless payments as almost all sectors, from healthcare to finance to education and retail, have had to shift to a digital-first mindset as consumers put COVID-19 safety measures at the top of their agenda,” he said.
“Ecommerce has also become a lifeline for consumers – and more so due to the pandemic. It allowed consumers to access to grocery supplies and other essentials, and merchants and served as a workable tool for business continuity amid COVID-19 restrictions.”
Nearly two-thirds of consumers in the Kingdom continue to buy groceries online, he said.
“These attitudes also prevail for luxury retail and fashion, with 90 percent of consumers choosing digital shopping channels and home delivery for convenience, safety and a more seamless overall shopping experience.”Visa’s growth plans for rest of 2022:
“Visa is committed to its role to support Saudi Arabia’s ambitions to develop a strong digital payments infrastructure to meet consumers’ expectations for frictionless and secure payments,” Bailoun said.
To ensure businesses are well-equipped with easy-to-use, innovative and cost-effective solutions, Visa plans to continue to work closely with the Kingdom’s government entities, banks and its fintech partners.
“We are working with fintechs and recently launched our Visa Everywhere Initiative to enable and support more fintechs and startups in Saudi to showcase their ground-breaking solutions that can help to solve payment challenges of the future,” he said.
Visa has so far partnered with Saudi fintechs such as stc pay, URPay, Hakbah and Mobily.
“In the years to come, Visa will continue to roll out new programs and resources that advance its commitment to digitally empowering SMBs and supporting business resilience.”Looking ahead:
Beyond 2022, Visa expects to see continued growth in contactless payments for in-store transactions and that demand for more contactless payments such as mobile point-of-sale (POS), biometrics, and Face Pay to gain momentum over the next few years, Bailoun said.
“Buy Now Pay Later is also becoming hugely popular with consumers globally and in Saudi Arabia. In fact, our 2022 Stay Secure survey revealed more than three-quarters of Saudi consumers are familiar with BNPL (Buy Now Pay Later), of which over a third have used it in the past,” he said.
“Visa is working with many of our merchant partners in the GCC to enable them to offer instalment payment options at the point of sale.”
The company also expects “real-time payments to take hold in the region in the coming year, as they already have in global markets, as expectations for smoother payments - whether peer-to-peer, business-to-consumer or cross-border – increase,” Bailoun said.
When asked about working with cryptocurrencies, the GM said that the exact role digital currencies will play “remain unclear.”
“Globally, our scale and work in cryptocurrencies have increased dramatically since last year, starting with the launch of the crypto card program with Crypto.com, which allows cardholders to use their crypto.com Visa card at our more than 70 million merchants around the world.”
To date, Visa has partnered with around 50 crypto platforms visa card programs that make it easy for consumers to convert and spend digital currency.