Countries like Saudi Arabia have positioned themselves as major players in the digital landscape. Additionally, lately, there has been an increase in interest in cryptocurrency in the country and region at large. Saudi Arabia has been dedicated to promoting a cashless society. Hence, it is not surprising that the country records at least a 12% yearly increase in cryptocurrency transactions.
Cashless Kingdom
Saudi Arabia’s Vision 2030 goal is to expedite the growth of Saudi Arabia’s digital economy and elevate the proportion of cashless transactions to 70% by 2025. Despite deep-rooted cultural traditions, particularly prevalent among shoppers and traders in local markets and souqs, Saudi Arabia has traditionally functioned as a predominantly cash-based society.
Just like many other Middle Eastern countries, individuals and merchants do not fully trust their country’s banking systems. This distrust caused some reluctance in the acceptance and usage of online transactions or debit/credit cards..
Lately, Saudi Arabia’s youthful population has changed all these. There has been a shift in payment preferences. The country has two-thirds of the population under the age of 35. Also, the country ranking third globally in smartphone usage with 24.2 million users, nearly three-quarters of the population now employ smartphones. A recent study by the Saudi Central Bank (SAMA) showed that electronic payments were higher than cash payments as the Kingdom’s predominant payment method in 2021, marking a significant milestone in this evolving financial landscape.
Digital and Mobile Payments in Saudi Arabia
Before the pandemic hit in 2020, the country embraced digitization. In the last five years the country recorded an increase in the use of payment of mobile devices at point of sale (POS). Statista’s Consumer Insights carried out a study to this effect. In 2019, it was recorded that 30% of the survey questions’ respondents used mobile payments at POS. In 2023, it increased to 49%. The provided statistics represent a rolling 12-month share of respondents who indicated using mobile payment devices, including smartphones and smartwatches, in offline shopping locations such as stores or restaurants.
Advantages of Crypto for Mobile Payments in Saudi Arabia
Given Saudi Arabia’s computer-literate population, it is not surprising that some of the country’s residents are cryptocurrency holders and investors. Here are some advantages of the residents and citizens using cryptocurrency for mobile payments.
Reduction in Cross-Border Transactions Cost
Cryptocurrencies promote very cost-effective cross-border transactions traditional banking systems might not guarantee. Saudi Arabia has a sizable number of foreigners living and working in the country. Cryptos will be very helpful for these residents to send money back to their family and friends in their home countries.
Financial Inclusion
Cryptocurrencies can help reach the underbanked or unbanked in Saudi Arabia. Crypto gives these people a chance to access financial services for mobile payments. All they need to carry out transactions is a mobile device and cryptocurrency.
Choice for Consumers and Businesses
Introducing cryptocurrency as a mobile payment option provides consumers and businesses with additional choices, fostering competition and potentially leading to improved services and lower transaction costs.
Final Words
The rapid expansion of mobile payments and the acceptance of cryptocurrencies in Saudi Arabia are indicative of a worldwide movement towards digital financial ecosystems. Saudi Arabia is at the front of this digital transformation, embracing the promise of cryptocurrencies and mobile payments to promote financial inclusion and economic development as technology breakthroughs continue to transform the financial environment.
