On May 11, Ant International, a pioneer in the digital payment and financial services sector, signed a Memorandum of Understanding (MoU) with Saudi Arabia's Ministry of Investment (MISA). This signifies Ant International's ambition to expand into Saudi Arabia and other Middle Eastern countries and regions.
In recent years, cooperation between Saudi Arabia and China in the fintech sector has deepened. Ant International is poised to capture a larger market share in the Middle East's payment and financial services sectors, offering merchant payment solutions, digital payment services for cross-border trade, and digital wholesale banking services regulated by the Monetary Authority of Singapore. These services will provide local customers with a broader range of payment solutions and financial services.
Saudi Arabia is accelerating the growth of its electronic payment sector. According to the Saudi Central Bank (SAMA), the total transaction volume for electronic payments in Saudi Arabia is projected to have a compound annual growth rate (CAGR) of 8.06% from 2021 to 2028, reaching an estimated total of $87.14 billion by 2028. Nearly 91% of Saudi consumers now shop through e-commerce, making it one of the most advanced markets currently. This achievement is due to Saudi Arabia's support for the financial sector over the past few years. One of the main goals of the Financial Sector Development Program (FSDP) is to increase the share of non-cash transactions from 16% in 2016 to 60% by 2022, and further to 70% by 2030.
The competition in Saudi Arabia's electronic payment market is moderate, with market participants including Paypal, Moyasar, Payfort, Paytabs, and Alipay. Companies operating in the market are taking various initiatives to expand their influence, thereby promoting market expansion. Additionally, the government's strong push for digital payment efforts will enhance market competition in the coming years.
Hafiz, from the Saudi Banks Cognition and Communication Committee, stated that Saudi Arabia is moving towards a cashless society, aiming to achieve 70% electronic payments by 2030. The Financial Sector Development Program (FSDP), supporting the "Vision 2030" initiative, aims to increase the use of non-cash transactions from 18% in 2016 to 28% by 2020, and to 70% by 2030. To encourage electronic payments and settlements, the Saudi government has introduced numerous electronic payment systems over the past two decades to assist consumers and institutions. This effort aligns with the ongoing initiatives by the Saudi Central Bank (SAMA), which in 2022 and 2023 implemented several measures, including issuing an open banking framework, approving the establishment of digital banks, granting fintech operational licenses, and testing digital currencies. These steps aim to strengthen the financial infrastructure, improve payment systems, and promote financial innovation and knowledge sharing through agreements like the MoU signed with the Hong Kong Monetary Authority.