Cards remain the most popular payment method for e-commerce transactions in Saudi Arabia, accounting for more than one-third of all online purchases. This highlights the continued dominance of cards in the Saudi Arabian e-commerce market and underscores the importance of card-based payment options for consumers, reveals the 2022 Financial Services Consumer Survey* by GlobalData, a leading data and analytics company.

An analysis of GlobalData’s E-Commerce Analytics reveals that Saudi Arabia’s e-commerce market was estimated to register a growth of 18.4% to reach SAR58.8 billion ($15.7 billion) in 2022, as increasing number of consumers shift from offline to online purchases. The market is expected to grow by 15.3% to reach SAR67.8 billion ($18.1 billion) in 2023.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “Saudi Arabia’s e-commerce market is in a growth phase, supported by the rising internet and smartphone penetration, increasing consumer confidence in online shopping, the emergence of e-commerce platforms and availability of alternative payment tools. Furthermore, the COVID-19 pandemic accelerated the shift in consumer preference from brick-and-mortar to online channels. The growth has also been supported by consumers increasingly shopping on foreign websites, as well as international retailers introducing online stores in Saudi Arabia.”

According to GlobalData’s 2022 Financial Services Consumer Survey*, over 90% of the Saudi consumers shopped online in the past six months while only 4% indicated that they never shopped online.

GlobalData’s survey also reveals that among the various tools used for e-commerce purchases, payment cards are the most preferred, collectively accounting for 34.9% share in 2022. This can be attributed to the value-added benefits offered on payment cards, including interest free instalment payments, reward programs, cashback, and discounts.

Among the traditional payment methods, bank transfers are also widely used and accounted for 26.7% of the total e-commerce payments value in 2022. Cash, on the other hand, has seen a constant drop in market share for online purchases due to the growing preference for electronic payments.

Alternative payment tools are also gaining popularity and now rank second, collectively accounting for 29% share of the e-commerce transaction value in 2022. Apple Pay, PayPal and STC Pay are some of the popular alternative payment brands in the country.

Sharma concludes: “Saudi Arabia will continue to witness strong growth in e-commerce sales and are anticipated to increase at a compound annual growth rate (CAGR) of 12.3% between 2022 and 2026 to reach SAR93.3 billion ($24.9 billion) in 2026. Although traditional payment methods like cards and bank transfers collectively occupy a larger share in overall e-commerce payments space, alternative payments are gradually disrupting their dominance.”

*GlobalData’s 2022 Financial Services Consumer Survey was carried out in Q2 2022. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.