Report Overview

The deepening smartphone penetration, with a large portion of the population and increasing acceptance and adoption of digital payment methods are projected to propel the expansion of the Saudi Arabia digital wallet market during the forecast period between 2023 and 2029.

Saudi Arabia Digital Wallet Market - Industry Trends & Forecast Report, 2029

Saudi Arabia Digital Wallet Market size was estimated at USD 438.41 million in 2022. During the forecast period between 2023 and 2029, the size of Saudi Arabia Digital Wallet Market is projected to grow at a CAGR of 13.07% reaching a value of USD 916.35 million by 2029. Major growth drivers for the Saudi Arabia Digital Wallet Market include the increasing adoption of digital wallet services within the country. Digital wallets, also recognized as e-wallets, serve as virtual platforms for storing and managing financial information. They empower users to conduct diverse transactions, including online payments, peer-to-peer transfers, and bill payments, without reliance on physical cash or traditional banking methods. A key driver for this surge is the growing smartphone penetration in Saudi Arabia, where a significant portion of the population owns smartphones. This widespread smartphone usage establishes a solid foundation for the pervasive adoption of digital wallets, given their ease of accessibility through mobile apps. As digital transactions become more ingrained in consumer behavior, the Saudi Arabia Digital Wallet Market is well-positioned for dynamic expansion, aligning with the country's tech-savvy populace and the increasing trend towards cashless transactions.

Digital Wallet – Overview

A digital or electronic wallet is a payment system that operates online, storing both financial values and personal identity information on a mobile device or computer. This technology facilitates electronic transactions and enables individuals to make purchases through a computer or smartphone from virtual stores. The digital wallet can be connected to an individual's bank account and may also house documents like driver's licenses, loyalty cards, and other identification papers on the phone. Beyond regular financial transactions, these digital wallets are increasingly employed to authenticate the holder's credentials, encompassing both software and information components.

Saudi Arabia Digital Wallet Market

Growth Drivers

Increasing Adoption of Digital Payment Mechanisms

In Saudi Arabia, the e-commerce industry is experiencing significant expansion, leading to the emergence of secure and efficient payment solutions. The increasing demand for digital wallets is closely tied to the growing e-commerce market, where these wallets provide a convenient option for seamless online transactions, fueling the overall industry growth. As one of the most advanced and rapidly growing economies in the Middle East, Saudi Arabia attributes over 15% of its GDP to the thriving e-commerce sector. This growth is further propelled by widespread smartphone usage and widespread access to high-quality internet connections, fostering a favorable environment for the surge in digital transactions. According to the World Bank Group, more than 93% of the population in Saudi Arabia enjoys reliable internet connectivity, accentuating the country's digital transaction landscape.

Restraints

Lack of Trust in Digital Transaction

The Saudi Arabia Digital Wallet Market faces growth limitations due to a lack of trust in digital transactions. The hesitation among users to fully embrace digital payment methods hampers the market's expansion. Despite the convenience and efficiency offered by digital wallets, concerns regarding security and trustworthiness act as deterrents, hindering widespread acceptance. Building consumer confidence in the safety and reliability of digital transactions is crucial for unlocking the full potential of the Saudi Arabia Digital Wallet Market. Addressing these trust-related challenges is imperative to foster greater adoption and stimulate market growth.

Impact of COVID-19 on Saudi Arabia Digital Wallet Market

COVID-19 pandemic had a positive impact on the Saudi Arabia Digital Wallet Market. With a heightened emphasis on contactless transactions and a shift towards online shopping, there has been an accelerated adoption of digital wallets. The pandemic acted as a catalyst for transforming consumer behavior, fostering a preference for secure and convenient digital payment methods. This surge in demand is further propelled by increased awareness of hygiene practices and a desire for touch-free transactions. As Saudi Arabia adapts to the new normal, the Digital Wallet Market is positioned for sustained growth, driven by the evolving payment preferences and the enduring impact of the pandemic.

Saudi Arabia Digital Wallet Market

Segmental Coverage

Saudi Arabia Digital Wallet Market – By Device

By device, the Saudi Arabia Digital Wallet Market is bifurcated into PCs/Laptops and Smartphones segments. The smartphones segment holds a higher share in the Saudi Arabia Digital Wallet Market by device. In 2021, the number of mobile cellular subscriptions in the country reached 45,427,321, marking a notable 5% increase from the previous year, as reported by the World Bank. Moreover, data from the General Authority for Statistics indicates that in 2022, an impressive 97.7% of individuals aged 15 and above in Saudi Arabia owned smartphones. This surge in smartphone ownership, accompanied by the widespread use of the internet and the increasing adoption of 5G technology, is anticipated to drive the utilization of digital wallets on smartphone devices. Consequently, this trend is expected to play a pivotal role in propelling the overall growth of the digital wallet market in the region.

Saudi Arabia Digital Wallet Market – By Application

Based on application, the Saudi Arabia Digital Wallet Market is divided into Money Transfer, Recharge, Movie Booking, and Food Ordering segments. The money transfer segment holds the highest share in the Saudi Arabia Digital Wallet Market by application. The increasing popularity of digital payment methods, particularly digital wallets, is fueling the need for secure and convenient money transfer solutions. Saudi Arabia, with its substantial smartphone penetration, is well-positioned to embrace mobile-based money transfer services facilitated by digital wallets. Additionally, the implementation of the Saudi Arabian Riyal Instant Transfer System (SARIE) in 2021 by the government further supports the shift towards digitalization and cashless transactions, encouraging the adoption of digital wallets for quick and secure money transfers.

Competitive Landscape

Major players operating in the Saudi Arabia Digital Wallet Market include STC Pay, Geidea Solutions, Hala, Alinma Pay, Friendi Pay, Meem, Mada Pay, HyperPay, BayanPay, and Careem. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In September 2023 - Alipay+ Payment Tech made its debut in the Middle East at Seamless Saudi Arabia 2023, where it presented its e-wallet solutions. Developed by Ant Group, Alipay+ enables the swift creation of e-wallet apps with superior functionality. The showcase included digital wallets, lending services, super apps, card acquiring, anti-fraud measures, and professional training programs. Tailored for the burgeoning Middle East market, Alipay+ aimed to support local partners in establishing successful e-wallet businesses, drawing on its global payment ecosystem expertise.

• In February 2023 - Saudi telecom provider Mobily expanded its mobile payment service, Mobily Pay, in collaboration with Ericsson. The five-year partnership aims to enhance the platform, offering users various financial services such as contactless payments, money transfers, international remittances, digital card payments, cash-back, bill payments, and mobile top-ups. The move aligns with Saudi Arabia's shift toward digital payments, with the government projecting a 70% non-cash transaction rate by 2030.

Scope of the Report

By Device

• PCs/Laptops

• Smartphones

By Application

• Money Transfer

• Recharge

• Movie Booking

• Food Ordering