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Saudi Arabia Cards and Payments Market Outlook to 2023

Increasing Penetration of Islamic Credit Cards Coupled with Rising Preference for Online Shopping to Drive Market Growth

Region:Middle East

Author(s):Himanshu Gupta

Product Code:KR883

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Published On

September 2019

Total pages

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About the Report

The report titled "Saudi Arabia Cards and Payments Market Outlook to 2023 – Increasing Penetration of Islamic Credit Cards Coupled with Rising Preference for Online Shopping to Drive Market Growth", provides a comprehensive analysis of payment card services in Saudi Arabia. The report focuses on overall market size for cards and payment services, SARIE market segmentation by Payments Type (Customer Payments, Interbank Payments and Others), Saudi Arabia’s Paper Clearing market segmentation by Type (Commercial and Personal Cheques and Interbank Cheques), by Region (Riyadh, Dammam, Jeddah, Makkah, Almadinah and Others); Cards and Payments Market by Stakeholders in Ecosystem, Digital Phase; Operating Model; Credit Card Market Size by Number of Cards in Circulation, Number of Transactions and Transaction Volume), By Revenue Stream in a Credit Card system, Credit Card market segmentation by Type (Personal Credit Cards and Commercial Credit Cards), by Competition Scenario in Credit Card market on the basis of Number of Cards in Circulation by Transaction Volume by Issuers and Operators; Credit Card Details for Top Banks; Regulations and Requirements related to Credit Cards; Credit Card market Future Outlook and Projections; Debit Card Market Size by Number of Cards in Circulation, Number of Transactions and Transaction Volume), by Revenue Stream in a Debit Card System, by Competition Scenario in Debit Card market on the basis of Number of Cards in Circulation and Transaction Volume by Issuers and Operators, Debit Card market Future Outlook and Projections; Major Bank Profiles in Cards and Payments Market (National Commercial Bank, Riyadh Bank, Arab National Bank, Saudi British Bank, Al Rajhi Bank and SAMBA Financial Group); American Express Profile; Strengths and Weaknesses of Major Banks; Snapshot on Prepaid Cards in Saudi Arabia, Snapshot on Charge Cards in Saudi Arabia and Anti Money Laundering Law. The report also covers overall trends and developments, issues and challenges; and analyst recommendations.

Market Size and Overview

The credit and debit card business of Saudi Arabia has witnessed steady growth owing to rising transaction volume, number of transaction and cards in circulation. The debit card transaction volume grew at a rate faster than the credit cards, even though both posed single digit growth rate. The credit market by transaction volume grew at a five year CAGR of 4.6%, whereas the debit card transaction volume grew at a five year CAGR of 8.6% during the review period 2013-2018. The number of debit cards in circulation is much more than the credit cards in circulation. When it comes to number of transactions, again the number of debit card transactions outweighs the total number of credit card transactions with a five year CAGR (2013-2018) of 9.9%. Number of credit card transactions as of 2018 witnessed a five year CAGR (2013-2018) of 11.8%, which is faster than debit card transactions growth rate.

Market Segmentation for Credit Cards: Credit cards in Saudi Arabia have been segmented on the basis of consumer entities i.e. personal credit cards and commercial credit cards. Number of personal credit cards in circulation witnessed a 5 year growth CAGR of 4.2% from 2013-2018. The personal credit card market by transaction volume grew at a five year CAGR of 9.5% from 2013 to 2018. The number of personal credit card transactions dominated with a five year CAGR (2013-2018) of 13.8% in 2018. Number of commercial credit cards in circulation witnessed a negative five year CAGR of (2.8%) from 2013 to 2018. The commercial credit card market by transaction volume declined at a negative five year CAGR of (4.4%) from 2013 to 2018. The number of commercial credit card transactions grew at a five year CAGR of 4.6% during 2013-2018.

Competition Stage and Company Positioning:

Competition within Saudi Arabia Cards and Payments Market has been moderately concentrated, with around 13 banks operating under credit cards and debit cards market. Major operators in the space are MasterCard, Visa and American Express. The market competition is based on the transaction volume and number of credit / debit cards in circulation. The overall card market of Saudi Arabia is still in its early growth stage as nearly 80.0% still uses cash as the main mode of payment. A large population remains unbanked along with new technical advancement every year which makes the industry young in its nature.

Competing Parameters: The major parameters on the basis of which the banks compete with each other include technological advancement in financial technology, physical card changes, reward point program, loyalty program, merchant discounts, annual maintenance charge, interest rates and others.

Future Outlook and Projections:

Increasing demand for Islamic cards owing to its shariah compliance and entrance of E-commerce giants for instance, Souq, Cobone, Haraj and AliExpress are collectively expected to drive the payment cards market in Saudi Arabia. The overall credit card market by number of cards in circulation is expected to rise at a five year CAGR of 6.4% in 2023. The number of credit card transactions is expected to surge at a CAGR of 13.1%, much higher than the prior period. The credit card transaction volume is also expected to increase at a five year CAGR of 8.6% by the year ending 2023. The overall debit card market by number of cards in circulation is expected to rise at a five year CAGR of 6.1% by 2023. The growth rate projected is almost similar to that of the credit cards due to high dominance of cash in the economy. The number of debit card transaction is expected to surge at a five year forecasted CAGR growth rate of 16.4% and the debit card transaction volume is expected to increase at a five year CAGR of 14.2% during the forecast period 2018-2023.

Key Topics Covered in the Report

Saudi Arabia Payments Landscape
SARIE Market
Paper Clearing Market
Payment Cards Stakeholders
Digital Phase in Saudi Arabia
Credit Cards Market Size
Credit Cards Market Segmentation
Revenue Stream in Credit Card System
Islamic Banking
Regulations and Requirements for Credit Cards
Competition Scenario in Credit Cards Market
Debit Cards Market Size
Debit Cards Market Segmentation
Revenue Stream in Debit Card System
Competition Scenario in Debit Cards Market
Snapshot on Prepaid Card Market
Snapshot on Charge Card Market
Trends and Developments
Issues and Challenges
Analyst Recommendations

Products

Time Period Captured in the Report:

Historical Period: 2013-2018
Forecast Period: 2018-2023

Companies

Key Segments Covered:

Saudi Arabia Payment Landscape

SARIE Market

By Payment Type(Interbank Payments, Customer Payments, Others)

Paper Clearing Market

By Type of Cheques(Commercial and Personal Cheques and Interbank Cheques)
By Region

Credit Cards Market

Number of Cards in Circulation,
Number of Transaction
Transaction Volume
Segmentation By Type(Personal and Commercial)
Revenue Stream in Credit Card
Credit Card Details by Major Issuers
Regulations and Requirements for Credit Cards
Competition Scenario by Issuers and Operators
By Number of Cards in Circulation
By Payment Transaction Volume
Future Projections

Debit Cards Market

Number of Cards in Circulation,
Number of Transaction
Transaction Volume
Revenue Stream in Debit Card
Competition Scenario by Issuers and Operators
By Number of Cards in Circulation
By Payment Transaction Volume
Future Projections

Banks Covered:

National Commercial Bank
Saudi Arabia British Bank
SAMBA Financial Service
Riyad Bank
Al Rajhi Bank
Arab National Bank

1. Executive Summary

1.1 Market Size and Overview

1.2 Market Segmentation for Credit cards

1.3Competitive Analysis

1.4Future Projections

2. Research Methodology

2.1. Market Definitions

2.2. Abbreviations

2.3. Market Size and Modeling

Consolidated Research Approach

Market Sizing Saudi Arabia Card Market

Variables (Dependent and Independent)

Multi Factor Based Sensitivity Model For Card Payments Market

Multi Factor Based Sensitivity Model For Debit Card Market

Regression Matrix- Card Market By Transaction Volume

Limitations-Credit Card Market By Transaction Volume

Conclusion- Card Market

3. Saudi Arabia Payments Market Overview (Economic Overview, Middle East Comparison,

Digitization in Financial Industry, Oil Price Impact on the KSA Cards and Payments Market,

Payment Split by Channel, SARIE, Paper Clearing Market, Cards and Payments Market and Expected
Economic Growth)

4. Saudi Arabian Riyal Interbank Express - SARIE

4.1. Introduction to SARIE (Overview, Genesis, Key Features, Target Audience and Objectives)

4.2. Value Chain Analysis

Charges and Minimum Required Balance

Flow of Funds from Bank A to Bank B

SARIE Features and Benefits

4.3. Market Size on the Basis of Number and Volume of Transactions, 2012-2018

4.4. Market Segmentation, 2012-2018

4.4.1. Type of Transactions (Customer Payments, Interbank Payments and Others, 2012-2018

4.5. Regulations

5. Saudi Arabia Paper Clearing Market

5.1. Paper Clearing Market Overview and Genesis / Introduction (How all paper-based payment
instruments such as cheques work in the KSA)

5.2. Value Chain Analysis

Settling of Funds

Time Taken for Clearing Process

Institutional Framework

Pricing

5.3. Market Size on the Basis of Number of Transactions and Transaction Volume, 2012-2018

5.4. Market Segmentation, 2012-2018

5.4.1. Type (Commercial & Personal Cheques and Interbank Cheques), 2012-2018

5.4.2. Regions (Riyadh, Jeddah, Dammam, Makkah, Almadinah, Buraydah, Abha, Ta'if, Tabuk and Jazan), 2018

5.5. Penalty for Bounced Cheques

6. Saudi Arabia Cards Payments Market

6.1. Stakeholders / Ecosystem

6.1.1. Card Issuer Side

6.2. Digital Phase in Saudi Arabia (Overview, SAMA, Use of POS Terminals, Use of Credit Card and Strategies)

7. Operating Model of Saudi Arabia Payment Cards Market (Business Model and Payment Car Transaction Flow Structure)

8. Credit Card Market in Saudi Arabia

8.1. Credit Cards Payments Market Size on the Basis of Number of Cards in Circulation, Number
of Transactions and Transaction Volume as at 31st December 2013 - as at 31st December 2018

Number of Credit Cards in Circulation, as at 31st December 2013 - as at 31st December 2018

Credit Card Number of Transactions, as at 31st December 2013 - as at 31st December 2018

Credit Card Transaction Volume, as at 31st December 2013 - as at 31st December 2018

Credit Card Average Value of Transaction, as at 31st December 2013 - as at 31st December 2018

8.2. Revenue Streams in a Credit Card System

8.3. Revenue Stream and Requirements for American Express Credit Cards

8.4. Market Segmentation, as at 31st December 2013 - as at 31st December 2018

8.4.1. Type (Personal Credit Cards and Commercial Credit Cards), as at 31st December 2013 - as at 31st December 2018

9. Comparative Landscape in Saudi Arabia Credit Cards Market

9.1. Competition Scenario

9.2. Market Share of Major Credit Card Issuers by Number of Cards in Circulation, 2013-2017

Number of Credit Cards in Circulation, 2013-2017

9.3. Market Share of Major Credit Card Issuers by Transaction Volume, 2013-2017
Transaction Volume By Issuer, 2013-2017

9.4. Market Share of Major Credit Card Operators by Number of Cards in Circulation, 2013-2017

9.5. Market Share of Major Credit Card Operators by Transaction Volume, 2013-2017

10. Credit Card Details for Top Banks (Annual Fee, VAT 5% on Fee, Total Charged, Cash

Withdrawal, Cash Withdrawal Commission, Transaction Amount, Conversion Rate, FX Mark-Up 2.75,

VAT 5% on Forex Markup, Annual Membership Fee, Annual Percentage Rate, Late Payment, Cash

Withdrawal Fee, Additional fee on non-Saudi Riyal transactions/ International, Replacement

Card, Credit Shield (Optional), VIP airports lounges access fee (Lounge Key) and Target
Audience)

10.1. National Commercial Bank

10.2. Riyad Bank

For Conventional Cards

For Islamic Cards

Virtual Credit Card by Riyad Bank

Charge-It Credit Card by Riyad Bank

10.3. Saudi Arabia British Bank (SABB)

10.4. Arab National Bank

11. Islamic Banking

11.1. Islamic Banking Overview (Terms and Conditions and Cross Comparison between Islamic and

Conventional Credit Cards Including Interest Fee, Shariah Compliant, Compounding Factor, Early

Payment Rebate, Non Permissible Transaction Filtering, Takaful Coverage and Zakat Payment
Acceptance)

12. Regulations and Requirements for Credit Cards

12.1. Regulations and Requirements Related to Credit Cards in Saudi Arabia

13. Saudi Arabia Credit Card Market Future Outlook and Projections, 2019E- 2023E

13.1. By Number of Cards in Circulation, Number of Transactions and Transaction Volume, 2018-2023

14. Debit Card Market in Saudi Arabia

14.1. Debit Card Payments Market Size on the Basis of Number of Cards in Circulation, Number of
Transactions and Transaction Volume

Number of Debit Cards in Circulation as at 31st December 2013 - as at 31st December 2018

Debit Card Number of Transactions as at 31st December 2013 - as at 31st December 2018

Debit Card Transaction Volume as at 31st December 2013 - as at 31st December 2018

Debit Card Average Value of Transaction as at 31st December 2013 - as at 31st December 2018

14.2. Revenue Stream in a Debit Card Transaction (Fees Charged by Issuing Bank)

15. Competition Landscape in Saudi Arabia Debit Cards Market

15.1. Competition Scenario (Competition Stage, Challenges Faced, Company Position, Leading
Debit Card Issuers and Leading Debit Card Operators)

15.2. Market Share of Major Debit Card Issuers By Number of Cards in Circulation

Number of Debit Cards in Circulation, 2013-2017

15.3. Market Share of Major Debit Card Issuer By Transaction Volume

Transaction volume By Issuer, 2013-2017

15.4. Market Share By Number of Cards in Circulation By Operator, 2013-2017

15.5. Market Share of Major Operator by Transaction Volume, 2013-2017

16. Saudi Arabia Debit Card Market Future Outlook and Projections, 2018- 2023

17. Major Bank Profiles in Saudi Cards and Payments Market (Overview, Business Strategies,

Branches, Revenue, Cards in Circulation and Recent Developments)

17.1. National Commercial Bank (NCB)

17.2. Saudi British Bank (SABB)

17.3. Riyad Bank

17.4. Al Rajhi Bank

17.5. Arab National Bank

17.6. SAMBA Financial Group

18. American Express Profile KSA (Overview, Operations in Saudi Arabia, Sources of Revenue and Business Strategies)

19. Strengths and Weaknesses of Major Banks

19.1. Strengths and Weaknesses of Major Banks

20. Snapshot on Prepaid Cards in Saudi Arabia (Definition and Operating Model, Market Size,

Growth Drivers and Future Prospects)

20.1. Prepaid Card Market Size on the Basis of Number of Cards in Circulation, Number of Transactions and Transaction Volume, 2013-2018

21. Snapshot on Charge Cards in Saudi Arabia (Definition and Operating Model, Market Size,

Growth Drivers, Comparison with Credit Cards and Competitive Landscape)

21.1. Charge Card Market Size in Saudi Arabia on the Basis of Number of Cards in Circulation, Number of Transactions and Transaction Volume, 2013-2018

22. Anti Money Laundering Law

22.1. Anti Money Laundering Law in the Saudi Arabia (Introduction, List of Offences and Penalties)

23. Trends and Developments

24. Issues and Challenges

25. Analyst Recommendations

Disclaimer

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