Riyadh, gulftech — Payment revenues in Saudi Arabia are expected to reach $28.3 billion by 2031 according to the new report by Boston Consulting Group (BCG), titled “Global Payments 2022: The New Growth Game.”
BCG’s 20th annual analysis of the payments industry in Saudi Arabia shows an expected Compound Annual Growth Rate (CAGR) of 11.2% between 2021 to 2031 on payment revenues. Among the areas of particular strength will be revenues from current accounts, credit cards, and electronic credit transfers.
Mohammad Khan, Managing Director & Partner, BCG, said: “In the last few years, Saudi Arabia has experienced high growth in the digital payments sphere as a result of the country’s strategic goals for the financial sector as part of Vision 2030. The drive is further stimulated by large investments toward the establishment of a robust regulatory framework. This in turn has stirred the private sector to unlock new and innovative digital transformation solutions, thereby offering native payments services to new stakeholders. As a result, the country is well on track to achieve 70 percent domestic adoption of online payments activity by 2025.”
Four Trends Driving the Global Payments Industry
The report outlines four trends that will shape the outlook for the global payments industry, which has some impact on Saudi Arabia, over the next five years:
The era of non-profitable growth is over. Payments players will have to demonstrate solid profitability to attract both customers and investors.
Demand for electronic payments is getting stronger. The sustained cash-to-noncash conversion, the ongoing growth of e-commerce, and the increasing integration of payments into retail and corporate customer journeys will drive payments revenues globally
Central bank digital currencies (CBDCs) are gaining momentum. Central banks are tailoring CBDCs to complement cash with digital central bank money to implement monetary policy faster.
Payment businesses are under increasing scrutiny from regulators. Market participants must address risk dimensions, be it financial, compliance, cyber, or crypto to install the required safeguards for their businesses on their path to growth.
“Payments revenues in the GCC will see acceleration on the back of real-time payments infrastructure, a growing number of specialized payments players bringing new solutions to the market, and enabling policies from governments,” concluded Khan.
