Saudi Arabia Digital Wallet Market Forecasts from 2023 to 2028

The Saudi Arabia digital wallet market is expected to grow at a compound annual growth rate of 21.87% over the forecast period to reach a market size of US$ 1, 404.670 million in 2028, from US$351.844 million in 2021.

Owing to the growing adoption and usage of digital wallet services within the country. A digital wallet, also known as an e-wallet, is a virtual platform that allows users to store and manage their financial information. These wallets enable users to make various transactions, including online payments, peer-to-peer transfers, bill payments, and more, without the need for physical cash or traditional banking methods.

A digital or electronic wallet is referred to as an internet or electronic-based payment system that stores both financial values as well as personal identity-related information in a mobile or computer. This helps an individual in making electronic transactions and purchasing items with a computer or a smartphone from a virtual store. The Bank account of an individual can also be linked to the digital wallet along with the driver’s license, loyalty card, or other ID documents that are stored on the phone. These digital wallets are increasingly being used not only for normal financial transactions but also for authentication of the holder's credentials having both software as well as information component.

The growing smartphone penetration, with a large portion of the population owning smartphones in Saudi Arabia, is driving the growth of the market. This widespread smartphone usage provides a solid foundation for the adoption of digital wallets as they can be easily accessed and used through mobile apps.

Population Demographics

Saudi Arabia has a young population with a strong inclination toward technology and digital services. This tech-savvy demographic is more likely to embrace digital payment solutions, including digital wallets, due to their convenience, ease of use, and alignment with their digital lifestyles. Moreover, the Saudi Arabian government has been actively promoting digital transformation and financial technology (fintech) initiatives as part of its Vision 2030 program. These initiatives aim to modernize the country's economy and reduce its dependence on cash transactions. As a result, the government has supported the development of digital payment systems, including digital wallets, through regulatory reforms and financial incentives.

Growth of e-commerce and social commerce.

Saudi Arabia has been witnessing growth in the expansion of its e-commerce industry which has resulted in the creation of seamless and secure payment solutions. As digital wallets offer a convenient payment option for online shopping, allowing users to make quick and hassle-free transactions, the e-commerce market continues to expand, resulting in the demand for digital wallets. The Saudi Arabia Kingdom is one of the most advanced and fastest-growing economies in the middle east. The market growth in this country is majorly driven by the rapid growth of e-commerce with a contribution of more than 15% to the country’s GDP. The growth of the e-commerce sector can also be supported by the high penetration of smartphones in this country and access to a good internet connection among people which is also favouring the increase in digital transactions in this country. According to data from the World Bank Group, more than 93% of people in this country have access to a good internet connection.

Key Developments.

Furthermore, in June 2022, MoneyGram International and Mobily Pay, a Saudi Arabia-based mobile wallet, entered into a partnership. Through this strategic partnership, the former's international cash-transferring solution will be integrated into the latter's digital wallet, allowing users to move money throughout the world in near real time.

Moreover, in February 2020, the Saudi Arabian Monetary Authority approved two digital financial companies BayanPay and HalalaH to launch their mobile wallet services in Saudi Arabia for enhancing payment flexibility and efficiency for businesses, consumers, and the government.

Positive growth through smartphones.

According to the World Bank’s data, in 2021, mobile cellular subscriptions in Saudi Arabia stood at 45, 427, 321 which signified an increase of 5% over 2020’s mobile subscriptions. Also, as per the General Authority for Statistics, in 2022, the rate of individuals aged 15 years and above who owned smartphones reached 97.7% in Saudi Arabia. Such an increase in smartphone penetration coupled with growing internet usage and 5G adoption are expected to boost the usage of digital wallets in smartphone devices thereby propelling the overall market growth.

Demand for instant money transfers.

The growing acceptance and adoption of digital payment methods, including digital wallets, are driving the demand for convenient and secure money transfer options. Moreover, Saudi Arabia has a high smartphone penetration rate, which provides a strong foundation for mobile-based money transfer services through digital wallets. Further, the Saudi Arabian government's introduction of the SARIE (Saudi Arabian Riyal Instant Transfer System) in 2021 promotes digitalization and cashless transactions, encouraging the use of digital wallets for secure and instant money transfers.

Key Market Segments

By Device

• PCs/Laptops
• Smartphones

By Application

• Money Transfer
• Recharge
• Movie Booking
• Food Ordering
• Others