COVID-19 triggered a widespread shift in adopting digital payment tools in Saudi Arabia.Further, challenges related to data security and increased fraud in online payments may hinder the growth of the mobile payments market in the region.

According to the Fintech Saudi Report, access to talent, the regulatory landscape, and the ability to test products and services are among the top three challenges.

Despite the rapid rise of mobile wallet fintech, the sector faces challenges.

For instance, the SAMA announced that the share of electronic payments in retail had exceeded 57% of total transactions conducted in 2021, surpassing the 55% target set out by the Financial Sector Development Program, one of the main programs of Saudi Vision 2030. this type of initiative is expected to boost mobile payments in the region over the forecast period.

Further, as part of the Saudi Vision 2030 program, the kingdom aims to make digital payments make up 70% of the total by 2025.

Mada Pay is the kingdom's first multi-issuer mobile wallet application that supports contactless (NFC) transactions to launch in Saudi Arabia.

For instance, the SAMA has taken many initiatives to encourage digital payments, one of which is a new electronic payments system, 'Mada pay,' which was recently created.

As a result, several projects are already underway to evolve the payments and financial ecosystem.

The Saudi Arabian financial services industry is experiencing unprecedented levels of change, with people moving towards new and disruptive technology payment trends from cash.

The primary factor driving the growth of the Saudi Arabia payments market is high internet and smartphone penetration, advancement in technology enabling secure and fast payments, and rising adoption of e-commerce and online shopping, among others. The Saudi Arabian mobile payments market is expected to register a CAGR of 22.7% during the forecast period.

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