Gabriel G Tabarani
Saudi Arabia’s move toward a cashless economy is often framed as a story of convenience and technological progress. Contactless payments, mobile wallets and fintech platforms are typically presented as symbols of modernization—welcome, but ultimately incremental. This reading understates what is really taking place. The Kingdom’s rapid adoption of digital payments represents a deeper economic reordering, one that reshapes how value circulates, how businesses operate and how the state exercises economic oversight.
In just a few years, Saudi Arabia’s payment landscape has changed dramatically. By 2023, electronic payments accounted for 70% of retail transactions, while 96% of point-of-sale payments were contactless. In 2024, the share of non-cash transactions rose to 79%, bringing the Kingdom within striking distance of its Vision 2030 target. This was not an organic shift driven solely by consumer preference. It was the result of deliberate policy choices aimed at reducing reliance on cash and the inefficiencies that accompany it.
Cash may appear neutral, but economically it is not. Heavy cash usage tends to entrench informality, obscure financial activity and restrict access to credit—especially for small and medium-sized enterprises. Digital payments, by contrast, accelerate cash flow, generate verifiable transaction data and make economic activity more visible and financeable. Research cited in recent impact assessments links increased digital payment adoption to higher GDP growth and a measurable decline in informal employment. In that sense, digital payments are not simply a tool of convenience, but a mechanism for productivity and structural reform.
The impact is particularly evident among SMEs, which form the backbone of Saudi Arabia’s non-oil economy. Faster settlement cycles, automated reconciliation and digital transaction histories allow smaller firms to improve liquidity management and access formal financing. As these businesses integrate into digital payment networks, they become easier to evaluate, support and scale—benefiting both private lenders and public economic planning.
What distinguishes Saudi Arabia’s experience from that of many emerging markets is the role of regulation. Fintech growth in the Kingdom has not occurred in a regulatory vacuum. The Saudi Central Bank and the Capital Market Authority moved early to establish licensing regimes, regulatory sandboxes and open banking frameworks designed to encourage innovation without undermining trust. This balance—between speed and control—has been critical. Rather than stifling innovation, regulation has functioned as an enabler, providing clarity and credibility in a rapidly evolving sector.
The results are visible. The number of fintech firms operating in Saudi Arabia rose from just 10 in 2018 to more than 260 by 2024, surpassing official targets ahead of schedule. Investment has exceeded SR7.9bn, while direct employment in the sector has climbed above 11,000 jobs. Payments firms dominate this ecosystem, reflecting their role as the entry point to broader digital financial services. Fintech, in short, has become an economic sector in its own right, not merely a supporting service.
Local players have been instrumental in translating policy ambition into operational reality. Companies such as HyperPay illustrate how payment gateways can evolve into integrated financial infrastructure, offering invoicing, automated payouts and analytics alongside core transaction services. The significance lies not in branding, but in function: payment technology is becoming embedded in day-to-day business operations, particularly for SMEs that lack the resources to build such systems internally.
Regionally, Saudi Arabia’s digital payments push is unfolding alongside broader momentum across the Gulf. Instant payment systems, open finance initiatives and efforts to streamline cross-border transactions point to a quiet competition over who will shape the region’s financial rails. As cash declines in relevance, payment networks increasingly resemble strategic infrastructure rather than mere financial utilities.
Yet the transformation is not without risk. Rapid digitization places mounting pressure on cybersecurity frameworks and data protection systems. Trust, once lost, is difficult to restore, and any major breach could slow adoption significantly. There is also a human dimension: gaps in digital skills among micro-enterprises and certain consumer segments risk creating uneven benefits unless addressed through targeted training and support.
Regulatory complexity presents another challenge. As data-driven finance expands and artificial intelligence becomes more deeply embedded in payment systems, questions around privacy, market concentration and fair access will grow more acute. At the regional level, inconsistent regulatory frameworks could turn cross-border transactions into a source of friction rather than integration.
These challenges do not invalidate Saudi Arabia’s cashless strategy, but they complicate it. Structural transitions of this scale rarely proceed without cost. The real test is no longer whether the Kingdom can reduce its reliance on cash—it clearly can—but whether it can manage the risks that accompany digitization with the same discipline that enabled its rapid adoption.
Ultimately, the significance of Saudi Arabia’s digital payments shift lies less in the technology itself than in what it enables. In a global economy increasingly shaped by data and financial velocity, control over payment infrastructure translates into economic leverage. The Kingdom’s wager is that by building this infrastructure early, and governing it carefully, it can turn digitization into a durable source of growth rather than a fleeting technological leap. Whether that wager pays off will depend on how effectively opportunity and risk are balanced in the years ahead.
This article was originally published in Arabic on the Asswak Al-Arab website
