Market Trends of Saudi Arabia Mobile Payments Industry
Growing E-commerce and Online Shopping Trends
- The rising need for online shopping among buyers primarily drives the e-commerce market of Saudi Arabia. This has led e-commerce vendors from across the globe to invest in the country's fast-growing e-commerce market. Further, leading regional companies are offering mobile payments as a checkout solution.
- The government is taking various initiatives to strengthen the e-commerce market in the country. The Kingdom has launched numerous initiatives to support e-commerce, including developing and promoting e-commerce education programs in academic institutions, building the capacity of local service providers, restructuring the postal sector, supporting e-commerce services in nonmainstream cities, and establishing guidelines for cybersecurity in e-commerce.
- Additionally, when the coronavirus initially hit Saudi Arabia, the country's government reacted swiftly by banning cash on delivery, with offline retailers requiring POS devices to accept debit and credit card payments, leading to a significant fall in cash transactions. This move resulted in a flurry of new fintech startups catering to the online market in the mobile payments sector. According to the Fintech Saudi initiative, the number of Fintech companies in Saudi Arabia rose to 147 in 2022, an increase of 14.7 times compared to 2018, when there were only ten companies.
- Moreover, as per Checkout.com's "Digital Payments in MENA 2022" report, more than one in ten people in Saudi Arabia spend money online at least once a day via e-commerce platforms. Additionally, 91% of Saudi shoppers regularly buy from e-commerce platforms, and 14% shop at least once daily.
Understand The Key Trends Shaping This Market
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Increasing Internet and Mobile Penetration Expected to Drive the Mobile Payments Market
- The Saudi Arabia mobile payments market is driven by the region's high internet and mobile penetration. This digital ecosystem in the region supports the latest technologies, and increased mobile and internet penetration further encourages consumers to shift towards mobile wallets as they provide ease and convenience with the best global security standards.
- As per data reported by GSMA Intelligence, there were 41.03 million cellular mobile connections in Saudi Arabia at the start of 2022. GSMA Intelligence's numbers indicated that mobile connections in Saudi Arabia were equivalent to 115% of the total population in January 2022. The number of mobile connections in Saudi Arabia increased by 1.3 million (+3.3% ) between 2021 and 2022.
- Moreover, the region has access to high internet speed, resulting in the immediate transfer of funds through mobile payments. For instance, data published by Ookla indicate that internet users in Saudi Arabia could have expected the following internet connection speeds at the start of 2022: Median mobile internet connection speed via cellular networks: 91.06 Mbps and Median fixed internet connection speed: 80.39 Mbps.
- Further, Ookla's data reveals that the median mobile internet connection speed in Saudi Arabia increased by 29.73 Mbps (+48.5%) in the twelve months to the start of 2022. Moreover, average download speeds in Saudi Arabia have reached more than twice the global average at 322 Mbps, according to network-testing company Ookla.
- Moreover, leading network providers are enhancing their market presence by offering 5G services across the country, eventually boosting the adoption of mobile payments faster. For instance, in June 2022, Comtech Telecommunications Corp. announced that the firm's trusted Location Group, a division of Comtech's Commercial Solutions segment, was awarded an agreement with a tier-one operator in the Kingdom of Saudi Arabia to support their 5G standalone network. The operator will grow the 5G network within the country, providing better performance to end-users and meeting new government mandates.
