Saudi Arabia Hit 85% Digital: The Rails Under the Card Are Next

HONG KONG, Nov 7, 2026 - ( JCN Newswire ) - Saudi Arabia crossed its cashless finish line quietly. Electronic payments covered 85 percent of retail transaction volume in 2025, up from 79 percent in 2024 and 70 percent in 2023, according to figures published through the Saudi Central Bank's statistical bulletin (SAMA via Arab News, 2025). The Vision 2030 target of 70 percent non-cash was reached in 2023, two years early, and the share has kept climbing since. On paper, this is the success phase of a national payments story: cash retreating, cards everywhere, terminals multiplying. In practice, the milestone changes the question. When nearly everyone already pays digitally, growth in the system no longer comes from converting cash users. It comes from moving activity between digital rails, and that contest has winners that look nothing like the card networks that built the first phase.

The numbers behind the milestone

The scale first. In the first quarter of 2026, the SARIE real-time gross settlement system, the wholesale rail that has existed since 1997, moved SR17.78 trillion in total value, up 16.1 percent year on year, of which SR12.74 trillion was interbank settlement and SR4.50 trillion was customer payments (SAMA Q1 2026 report, 2026). The retail layer that sits on top processed 2.98 billion POS transactions in the same quarter, against 359 million ATM withdrawals and a card base of 66.9 million issued cards. Across the full year 2025, electronic payments totaled 14.6 billion transactions, up from 12.6 billion in 2024, of which POS accounted for 11.5 billion (SAMA bulletin via Arab News, 2025). Cash has not vanished: SR393.8 billion was still withdrawn from machines across 2025. Those four figures together describe an economy where the default transaction is electronic, and the ATM is an edge case rather than a habit.

The instant rail is the part growing fastest. The lowercase sarie instant payment system, launched by SAMA on February 21, 2021, handled 784 million transactions in 2025, up 32 percent year on year (SAMA, 2025). By August 2026 the monthly run rate reached 93.7 million transactions worth SR96.87 billion (SAMA bulletin via Arab News, 2026). In June 2026 the instant system's total volume was up 26.1 percent year on year. Growth at that pace, three years after launch, is not a novelty curve. It is a rail becoming infrastructure.

Table 1: Channel split of Saudi retail payment activity across the most recent reported periods.

Source: Saudi Central Bank 🔗, monthly statistical bulletins and Q1 2026 report, 2025 to 2026.

The structural variable: a second, cheaper checkout

The variable that decides the next five years is not whether Saudis pay digitally. It is which account-to-account path the transaction takes when they do. Two regulatory facts define it. First, SAMA began issuing live open banking licences in March 2026 after the sandbox phase closed, and the framework covers payment initiation as well as account information (TechScoop, 2026). Payment initiation is the consequential half: it lets a licensed third party instruct a payment directly from a customer's bank account, routing the transaction around the card networks entirely. Second, the instant rail underneath it is already fast, cheap to operate and owned by the central bank rather than by a scheme that charges per swipe.

On paper, a licensed payment-initiation service is one product among many. In practice, it is a price challenge to the acquiring side of the card business. A merchant paying card fees on high volumes of low-margin transactions has, for the first time in the Kingdom, a regulated alternative at checkout: the customer authorizes from a bank account, settlement lands through sarie, and the interchange and scheme fees fall out of the transaction. The merchant does not care that the money arrived by a different rail. The acquirer very much does.

The e-commerce channel is where that alternative gets its test, and the volume base is already large. Mada cards carried 566 million e-commerce transactions in Q2 2026 alone, worth more than SR101 billion (SAMA bulletin via Saudi Gazette, 2026). Every one of those transactions today runs as a card payment: card entered or tokenized, authenticated, interchange charged, settled in batches. A payment-initiation checkout replaces that sequence with an account authorization and an instant transfer. The economics of the two sequences differ by the fees that disappear, and the user experience differs by a redirect instead of a card form. Bill payments already run on a separate national spine, SADAD, which handles utility and government receivables from inside banking apps; the checkout is the last large consumer surface still owned by the card sequence, which is why the March 2026 licence matters more in e-commerce than anywhere else.

Where the pressure shows up first

The migration will not announce itself as a single event. It shows up as a widening spread between the online and physical halves of the card world, and between transaction counts and transaction values. Both spreads are already open. Mada e-commerce sales reached SR101.4 billion in Q2 2026, up 32.3 percent from SR76.6 billion a year earlier, while POS sales in the same quarter fell 4.8 percent from Q1 to SR170.1 billion and grew only 6.8 percent year on year in July (SAMA bulletin via Saudi Gazette, 2026). E-commerce is where volume is going, and checkout is where the payment-initiation alternative bites first, because an online checkout is just a redirect away from an account payment.

The second leading indicator is the terminal count running against the value it carries. POS terminals rose slightly to 2.45 million in Q2 2026 from 2.40 million in Q1, yet POS value fell 4.8 percent on the quarter. More terminals, less value per terminal is the signature of a channel being defended rather than grown. The third is the ATM line: 359 million withdrawals in Q1 2026 against 2.98 billion POS transactions, a ratio that keeps compressing as cash use retreats. None of these three is conclusive alone. Together they describe where the marginal transaction is landing, and it is not the swipe.

The two indicators worth watching are independent of each other, which is what makes them usable. sarie instant volume growth measures consumer and business adoption of the account-to-account rail; Mada e-commerce growth against POS growth measures where checkout demand sits. The card-squeeze thesis needs both to keep moving. If sarie volumes keep compounding at 25 to 30 percent while open banking payment-initiation volumes scale, the thesis holds. If either one stalls, the squeeze stalls with it.

Why the instant rail won its first market so fast

The instant system did not grow 32 percent in 2025 because consumers discovered novelty. It grew because of a price list. At launch in February 2021, SAMA set the sarie single-transfer ceiling at SAR 20,000, the express transfer limit at SAR 2,500, and the maximum customer fee at SAR 1 per transfer (SAMA Rulebook via SPA, 2021). One riyal, any hour, any bank, versus a card acceptance stack with hardware, acquiring fees and settlement lag. For person-to-person money movement, the contest was over before it started. Five years later the rail that cost one riyal to ride is moving 93.7 million transactions a month.

The domestic card scheme complicates any simple card-versus-instant framing, and the analyst has to keep both threads. Mada, the national debit network operated under SAMA's supervision, processed more than 8 billion transactions across 2025 and remains the workhorse of physical retail, with 2.45 million POS terminals deployed by Q2 2026 (SAMA, 2026). In August 2025 alone, Mada e-commerce moved SR36.95 billion across 196.9 million transactions (SAMA bulletin via Arab News, 2025). So the card rail is not dying; it is absorbing the e-commerce wave first. The structural question is what happens in the next wave, when a licensed payment-initiation checkout can present the account itself as the payment method at the same online counters that taught consumers to pay without swiping.

Around both rails, the wallet layer thickened. By 2026 the licensed wallet and instant-payment consumer brands included STC Pay, Hala, Barq, UrPay, Mobily Pay, Tiqmo and Alinma Pay, several of them bank-owned, several telecom-owned, all riding the same instant infrastructure (Economy Middle East, 2026). This is the quiet difference between Saudi Arabia and markets where instant payment adoption dragged: the consumer habit of paying from an account, rather than from a stored card, was built in the last five years rather than the last fifty. Europe's open banking has struggled commercially partly because it retrofitted account payments onto decades of card habit. Saudi Arabia is building account-first checkout onto a population that never formed deep card habits in the first place. The switch cost is lower here than almost anywhere else at comparable income levels.

The money and the mandate

Two capital facts frame how fast the checkout shift can run. The official one: Saudi fintech's projected contribution to GDP is set at SAR 13.3 billion by 2030, against SAR 1.2 billion in 2021, an explicit government target rather than a market estimate (Economy Middle East, 2026). The market one: venture funding in Saudi Arabia fell 74 percent year on year in the first half of 2026, and fintech's share of what remained rose from 28 percent to 67 percent (MAGNiTT via TechScoop, 2026). Read together, the state is underwriting the category's long arc while private capital concentrates into fewer, later-stage bets. Payment initiation sits exactly where those two forces meet: it is the licensed product category the state has authorized and the revenue category investors are still funding when everything else contracts.

That concentration has a hard edge. A 74 percent contraction in available venture capital means the open banking startups building payment-initiation checkouts are not racing each other on growth; they are racing to demonstrate transaction volume that justifies a later-stage round. Their incentive is to push adoption at merchants as fast as licensing allows, which serves the migration thesis. The same contraction means the number of companies able to execute is small, so the shift is likelier to arrive through two or three well-capitalized checkout providers than through a hundred experiments. For the acquirers watching their fee pool, a small number of visible competitors is easier to price than a swarm, but easier to negotiate with too.

Who carries the loss first

The first losses land on the cash economy's remaining service layer, which is mostly a bank cost line rather than a revenue line: ATM fleets, cash-in-transit contracts, branch teller time. That migration is a relief for bank margins, not a threat. The second group is more exposed: merchant acquirers and terminal deployment businesses whose model assumes card-present volume keeps growing into the terminal base they financed. A 4.8 percent quarterly decline in POS value while terminals expand is what the front of that looks like. The third group, the international card schemes, loses last and least in consumer debit, because mada, the domestic debit scheme, dominates the Kingdom's card base anyway; their real exposure is the interchange they never collected in the first place and the e-commerce mix shifting to rails they do not operate.


Banks sit on both sides of the ledger, which is why their behavior is ambiguous. Open banking turns their customer relationship into infrastructure that licensed third parties can build on, a competitive loss. But the same banks operate the accounts that sarie payments land in, and they save the acquiring-side cost when settlement is internal. The Saudi banking sector is concentrated in a small number of large institutions, which makes the coordination problem of raising everyone to an open banking standard tractable, and it also means no single bank can defect from the standard without isolating itself. The result is a sector that will implement the rails that erode its own card fees, because the alternative is watching a licensed competitor do it.


The remittance corridor is the adjacent market worth naming, because it shows the same structural logic already priced in. Saudi Arabia hosts one of the world's largest expatriate workforces, and outward remittances have historically flowed through correspondent banking with meaningful fees per transfer. The instant rail does not itself settle cross-border, but the same central-bank-owned infrastructure mindset is extending outward, and several MENA central banks are benchmarking the sarie architecture as they build their own real-time systems (Economy Middle East, 2026). A domestic instant rail that residents trust is the first step in a corridor business: the money still crosses a border, but the customer experience, the authorization and the fee expectation are all set by the account-to-account habit. Card networks do not collect on any of that.

The signals that would falsify this

The judgment here is refutable in three specific ways, and each has a named meter. If SAMA's open banking statistics show payment-initiation transaction counts staying immaterial through 2027, the regulatory permission was real but the checkout shift is not, and the card economics stand. If POS terminal counts keep rising while POS value per terminal stabilizes and resumes growth, the acquiring business is still expanding, not defending. If sarie instant transaction growth decelerates below POS growth for two consecutive quarters, the instant rail is plateauing as a peer-to-peer convenience rather than becoming a checkout rail. Any one of those three breaks the thesis. As of the latest bulletins, all three are running the other way.

Data basis

Data as of November 2026. Electronic share of retail payments (70 percent in 2023, 79 percent in 2024, 85 percent in 2025) comes from SAMA statistical bulletins as reported through Arab News. SARIE wholesale values, POS, ATM and card counts for Q1 2026 come from the SAMA Q1 2026 report. sarie instant launch date, transaction counts and growth rates come from SAMA publications covering February 2021 through August 2026. Mada e-commerce and POS quarterly and monthly values for 2026 come from the SAMA monthly statistical bulletin as republished by Saudi Gazette. The open banking licensing date and the distinction between account information and payment initiation services come from coverage of the March 2026 licence announcement. Measure types are actuals throughout; no forecast values are used, and the 2026 growth figures are year-on-year or quarter-on-quarter changes of measured values, not projections. Limitations: SAMA's published open banking usage statistics were not yet detailed enough at drafting time to size payment-initiation volumes directly, so that variable is treated directionally; POS sector composition effects on the Q2 dip are not decomposable from public bulletins; and the terminal count is a stock while value is a flow, so the per-terminal comparison is indicative rather than exact.

Sources

Saudi Central Bank, monthly statistical bulletins and Q1 2026 payments system report, 2025 to 2026 (site home)
Saudi Gazette, Mada e-commerce SR101.4 billion in Q2 2026 and POS trends, September 2026
Arab News, SAMA bulletin coverage: 85 percent electronic share of retail payments in 2025 (site home)
TechScoop, SAMA open banking first live licences, March 2026
Economy Middle East, Vision 2030 non-cash target reached 2023, 2026


This article was prepared by the expert team at Global Infinity Labs, drawing on insights and data provided through its MCP data services.

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