Virtual payments have reportedly exceeded the use of cash for the very first time in Saudi Arabia in 2021, with these digital transactions accounting for around 94% of payments completed when measured in terms of value. This, according to a recent study carried out by the Saudi reserve bank.
In terms of total volume, the use of digital payments surged to over 60% in 2021 from just 44% back in 2019 across key areas of economic activities in the Kingdom.
The Saudi Arabian government sector is getting closer to fully transitioning to all-digital transactions for outbound payments to individual consumers, businesses or other government entities, the update revealed.
As first reported by Arab News, the study found that cash is not the most widely used method of settling transactions by individuals for the first time in the Middle Eastern nation.
This development comes as virtual payments made by individuals have increased considerably to reach 57% in 2021 of the overall number of transfers made, when compared to only about 35% in 2019, the report noted.
The update also mentioned that when it comes to the nation’s business sector, the total share of virtual payments hit a sizeable 84% of all business transactions last year, up considerably from 51% in 2019, registering a growth of 65% during the past couple years.
Consistent with Saudi Vision 2030, this comes as part of the Saudi government’s ongoing plans to support virtual payment services in order to transform the nation to a less-cash dependent society by reaching 70% of non-cash transfers by the year 2025.
As covered recently, Thunes, a cross-border payments company, recently announced that it is accelerating the expansion of its services in the MENA region, “setting up an office in the Kingdom of Saudi Arabia, and appointing a new country head – Ahmad Yaacoub.”
Thunes is also “in advanced stages to sign partnerships with local Money Transfer Operators, e-wallets service providers, and banks.”
Saudi Arabia’s digital payments market is “evolving fast to keep pace with the Kingdom’s ‘Vision 2030’, which aims to increase the number of cashless transactions to 70% in 2025.”