Mohamed Ramzy

Saudi Arabia relies on financial technology (fintech) applications to promote financial inclusion, in alignment with Vision 2030’s goals of increasing the share of non-cash transactions (digital transactions) amongst individuals and reducing the use of cash to 70% by 2025.

One of Saudi Arabia’s main goals is to increase the number of fintech firms to 230 by the end of 2025, with aspirations to reach 525 fintech firms by 2030. In doing so, the Kingdom encouraged the establishment of new fintech firms to create almost 18,000 jobs and contribute around SAR 13.3 billion to the national gross domestic product (GDP). 

The fintech ecosystem in Saudi Arabia has witnessed great momentum since the Saudi Central Bank (SAMA) launched the Fintech Saudi initiative in 2018 aiming to foster innovation and collaboration between startups and investors as well as other active entities. 

According to the Fintech Report 2022 released by SAMA, there were seven licensed fintech firms in the Kingdom in 2018, then the number doubled to 14 in 2019 and continued to rise until it reached 30 by the end of 2022. 

By the end of 2023, the number of fintech firms surpassed the 2023 target of 150 firms to hit 216 fintech firms offering various financial solutions, including digital payments and e-wallets. This considerable momentum in the fintech sector positioned Saudi Arabia as a prime destination for venture capital (VC) investments.

During the first nine months of 2024, Saudi startups secured $509 million, seizing 40% of the funding raised in the Middle East and North Africa (MENA) region, as stated in a recent report by MAGNiTT. Fintech remained the top sector with investments worth $480 million, representing 37% of MENA’s total funding. 

Finally, these records reflect the Kingdom’s efforts to support innovation in the fintech sector as it is a key pillar to achieving financial inclusion and creating a non-cash society. 

Translation: Noha Gad

Ghada Ismail

As the financial landscape evolves at a crazy pace, Saudi Arabia is embracing digital transformations in its banking sector. A key development is the rise of neobanks, which offer services exclusively online without physical branches, challenging the dominance of traditional banks. This article comprehensively explores the differences between neobanking and traditional banking in Saudi Arabia, examining their benefits, limitations, and impact on consumers.

What Are Neobanks and Traditional Banks?

Neobanks are financial institutions that operate entirely online. They provide services such as checking and savings accounts, loans, and payment services through mobile apps and websites. In Saudi Arabia, neobanks aim to provide a seamless user experience with minimal fees, leveraging technology for personalized services. Examples of neobanks in Saudi Arabia include STC Pay and Samba Digital.

Traditional Banks, on the other hand, have physical branches and a long-standing presence in the market. They offer a wide range of financial services, from basic banking to complex investment products. Key players in the Saudi Arabian market include Saudi National Bank, Riyad Bank, and Al Rajhi Bank.

Key Differences between Neobanks and Traditional Banks

1. Accessibility and Convenience

Neobanks: Operate fully online, which allows users to access their accounts and manage finances anytime and anywhere through mobile apps or web interfaces. This accessibility aligns with the increasing digital-savvy population in Saudi Arabia, particularly among the youth who prefer online services.

Traditional Banks: Require customers to visit physical branches for certain services, which can be inconvenient. However, many traditional banks in Saudi Arabia have also embraced digital transformation, offering mobile banking apps and online services.

2. Cost Structure

Neobanks: Typically have lower operational costs due to the absence of physical branches. As a result, they often offer lower fees or even fee-free banking. In Saudi Arabia, some neobanks offer no-fee accounts, competitive exchange rates, and reduced international transaction fees.

Traditional Banks: While they offer comprehensive services, traditional banks generally have higher fees to cover branch operations and maintenance costs. For example, fees for international transfers, ATM withdrawals, and account maintenance can be higher than those charged by neobanks.

3. Range of Services

Neobanks: Initially focused on core banking services, neobanks in Saudi Arabia are expanding their offerings to include personal loans, credit facilities, and investment products. However, their range of services is still limited compared to traditional banks.

Traditional Banks: Provide a more comprehensive suite of services, including mortgages, corporate banking, and wealth management. Saudi Arabian banks also have established relationships with government entities, which can be beneficial for customers who need government-related financial services.

4. Customer Experience and Technology

Neobanks: Leverage advanced technology to provide a streamlined, user-friendly experience. They offer features such as instant notifications, spending analysis, and budgeting tools, which appeal to tech-savvy customers.

Traditional Banks: Although they are investing in digital services, traditional banks in Saudi Arabia are often perceived as slower to adopt cutting-edge technologies. However, their emphasis on customer service through personal interaction and relationship management remains a significant advantage.

5. Security and Trust

Neobanks: Since they are relatively new, neobanks may face trust issues among older or less tech-oriented customers. However, in Saudi Arabia, neobanks are regulated by the Saudi Central Bank (SAMA), which ensures compliance with stringent security and privacy standards.

Traditional Banks: Enjoy a high level of trust due to their long-standing presence and adherence to local regulations. In Saudi Arabia, traditional banks are perceived as more secure, especially by those who prefer in-person services.

Advantages of Neobanking in Saudi Arabia

Digital Focus: With Saudi Arabia's Vision 2030 initiative emphasizing digital transformation, neobanks align with the Kingdom’s goals by promoting cashless transactions and enhancing financial inclusion.

Cost Savings: Neobanks often eliminate common banking fees, appealing to younger and cost-conscious consumers.

Quick and Easy Account Opening: Customers can open accounts online within minutes, which is particularly attractive to the youth demographic.

Advantages of Traditional Banking in Saudi Arabia

Comprehensive Services: Traditional banks provide a wide array of services, which is beneficial for customers who need access to complex financial products.

Established Trust: Many customers prefer traditional banks due to their established reputation, branch networks, and face-to-face interaction options.

Strong Government Ties: Traditional banks in Saudi Arabia often have close relationships with governmental bodies, which can be advantageous for customers requiring government-related financial services.

Challenges and Future Outlook

For Neobanks, a key challenge is gaining consumer trust. Many customers in Saudi Arabia still value the in-person support offered by traditional banks. Additionally, while neobanks are regulated by SAMA, they must continue to strengthen cybersecurity measures to protect against digital threats.

For Traditional Banks, staying competitive will require further investment in digital transformation to meet the growing demand for online services. Traditional banks must also find ways to streamline operations and reduce costs to compete with the low-fee structure of neobanks.

As Vision 2030 drives technological innovation in the financial sector, the Saudi Arabian market is likely to see increased collaboration between traditional banks and neobanks. For example, partnerships where traditional banks offer white-labeled neobanking services could become a trend, providing customers with the best of both worlds.

Neobanks and traditional banks each offer unique advantages and face distinct challenges in Saudi Arabia. The choice between the two will largely depend on individual preferences, financial needs, and comfort with digital services. As the Saudi market evolves, the coexistence of neobanks and traditional banks will likely foster a more diverse and customer-centric financial ecosystem.

Noha Gad

One of the key objectives of the Saudi Vision 2030 is to reduce the reliance on cash and promote a cashless society, transforming the way individuals manage their money and make transactions. Driven by this objective, e-wallets emerged as a revolutionary financial tool in Saudi Arabia that brought significant changes to consumer behavior.

E-wallets are rapidly becoming the preferred payment method as they offer users a seamless way to store funds, pay for goods and services, and transfer money, all through their smartphones.

Digital wallets, such as STC Pay, Mada Pay, Apple Pay, and Sadad Wallet, drive the Kingdom’s shift towards a cashless society thanks to their convenience, security, and flexibility.

The rapid increase in smartphone usage and internet penetration has been a key factor in accelerating the shift toward digital payments and e-wallets in Saudi Arabia. Additionally, the adoption of digital financial services surged as more citizens gained access to mobile devices and high-speed internet.

Impacts of e-wallet on consumer behavior in Saudi Arabia

The shift towards digital payments is not just a matter of convenience; it is fundamentally changing purchasing habits, financial management, and preferences for payment methods. 

E-wallets play a crucial role in increasing spending, driving the shift to online shopping, fueling the adoption of contactless payments, raising financial awareness and control, reducing cash dependency, and enhancing financial inclusion in Saudi Arabia.

Many e-wallet providers in Saudi Arabia offer loyalty programs, cashback, and rewards for using their services. This incentivized consumers to choose e-wallets over other payment methods, further embedding these digital tools in their daily routines.

Finally, e-wallets also impact consumer behavior by providing financial services to the unbanked or underbanked populations, contributing to achieving the Kingdom’s financial inclusion goals by enabling individuals who previously lacked access to traditional banking to participate in the digital economy, expand their financial capabilities, and improve their quality of life.

Kholoud Hussein 

Saudi Arabia is at the forefront of a digital banking revolution, driven by the rapid adoption of mobile wallets and an ambitious push toward a cashless economy. As part of Vision 2030, the Kingdom is accelerating its transition to digital payments, with mobile wallets playing a pivotal role in reshaping the financial ecosystem. With mobile wallets offering seamless payment solutions, enhanced convenience, and greater financial inclusion, Saudi Arabia is moving closer to its goal of becoming a cashless society by 2025. This article explores the rise of mobile wallets, their impact on the digital banking sector, and their future in transforming the financial landscape of Saudi Arabia.

Saudi Arabia’s Cashless Vision: The Role of Mobile Wallets

In recent years, Saudi Arabia has made significant strides in moving towards a cashless economy, a key pillar of the Vision 2030 strategy aimed at diversifying the Kingdom’s economy. The government, in partnership with financial institutions and fintech companies, has launched several initiatives to reduce reliance on cash and encourage the use of digital payment methods. One of the most significant developments in this journey has been the rise of mobile wallets, which offer consumers a convenient, secure, and efficient payment method.

According to the Saudi Central Bank (SAMA), the percentage of non-cash transactions reached 57% in 2024, up from 36% in 2019. The rapid growth of mobile wallets is a key driver behind this increase. Speaking at the 2024 Financial Sector Conference, SAMA Governor Ayman Al-Sayari highlighted the role of digital wallets, stating, “The adoption of mobile wallets is accelerating our journey towards a cashless economy, providing consumers with seamless access to financial services while enhancing financial inclusion.”

The success of mobile wallets in Saudi Arabia is also evident in the rising number of transactions made through digital platforms. A 2024 report by PwC noted that mobile wallet transactions in the Kingdom increased by 45% year-on-year, with more consumers opting for cashless solutions in their daily financial activities.

Top Mobile Wallets in Saudi Arabia: Leading the Digital Banking Revolution

Several mobile wallet apps spearhead Saudi Arabia’s transition to digital banking, offering a range of services catering to consumers and businesses. Here’s a closer look at some of the top mobile wallets in Saudi Arabia and how they are reshaping the financial landscape:

1. STC Pay: The mobile wallet app launched by Saudi Telecom Company (STC), is one of the most prominent players in Saudi Arabia’s digital banking ecosystem. Since its launch, STC Pay has grown rapidly, becoming the first Saudi fintech unicorn with over 8 million users as of 2024. The platform offers a wide range of services, including peer-to-peer transfers, bill payments, and online shopping, making it a comprehensive solution for digital payments.

In 2024, STC Pay announced a major expansion of its services, introducing international remittances in partnership with Western Union, allowing users to send money abroad seamlessly. Speaking about the company’s vision, Ahmed Al-Enizi, CEO of STC Pay, remarked, “We aim to provide a one-stop solution for all financial needs, from local payments to cross-border transfers. Our goal is to continue expanding our services and reach, making financial services more accessible to everyone.”

STC Pay’s success reflects the broader trend of consumers shifting towards mobile-first banking, where financial transactions can be completed with just a few taps on a smartphone. As more features are integrated into the platform, such as loyalty programs and savings tools, STC Pay is positioned to play a significant role in the future of digital banking in Saudi Arabia.

2. Apple Pay: The wallet has quickly become a popular payment method in Saudi Arabia, offering a secure and easy-to-use platform for making purchases. With its integration into Mada, Saudi Arabia’s national payment network, Apple Pay has gained widespread acceptance at retail outlets, restaurants, and online platforms across the Kingdom.

Apple Pay’s emphasis on security through its use of biometric authentication (Face ID and Touch ID) and tokenization has made it a trusted choice for consumers. A 2024 survey by YouGov revealed that 76% of Saudi users consider Apple Pay one of the most secure mobile payment options available. The ability to store multiple cards and use Apple Pay across various devices—iPhones, Apple Watches, and iPads—has contributed to its popularity.

In terms of expansion, Apple Pay is expected to introduce additional features such as Apple Card, a digital credit card service that could provide users with cashback incentives and better financial management tools. By offering a seamless user experience and integrating additional services, Apple Pay will likely continue to capture a significant share of the mobile wallet market in Saudi Arabia.

3. Mada Pay: The wallet, operated by Saudi Payments, is a homegrown mobile wallet solution that allows users to make contactless payments directly from their smartphones. It is fully integrated with Mada, the Kingdom’s domestic payment network, and supports payments across millions of point-of-sale (POS) terminals in Saudi Arabia.

Since its launch, Mada Pay has become an essential tool for small and medium-sized enterprises (SMEs) and retailers, facilitating quick and secure transactions without the need for physical cards. Fahad Al-Abdulkarim, CEO of Saudi Payments, spoke at Seamless KSA 2024, stating, “Mada Pay’s growth reflects the increasing demand for local, secure, and efficient payment solutions. We are committed to enhancing the platform’s functionality to support more advanced services like micro-loans and SME financing.”

Mada Pay is set to expand its services in the coming years, with plans to integrate financial management tools and budgeting features. This will allow users to track their spending, receive insights into their financial habits, and set savings goals—all within the app. By offering a comprehensive financial solution, Mada Pay aims to become a cornerstone of Saudi Arabia’s digital banking ecosystem.

4. Al Rajhi Wallet: It is one of the largest Islamic banks in the world, and has also made significant strides in digital banking through its Al Rajhi Wallet. The mobile app allows users to conduct a wide range of banking activities, including bill payments, peer-to-peer transfers, and e-commerce transactions.

In 2024, Al Rajhi Wallet introduced new features such as contactless payments through QR codes and e-vouchers, allowing customers to make payments with greater convenience. The wallet also supports Zakat and Sadaqah payments, enabling users to fulfill religious obligations seamlessly. Waleed Al-Mogbel, CEO of Al Rajhi Bank, noted, “Our focus is on providing customers with a comprehensive, Shariah-compliant digital banking experience that meets their financial needs and promotes financial inclusion.”

Looking ahead, Al Rajhi Wallet is expected to expand its offerings to include investment services and personal finance management tools, allowing users to manage their wealth directly from the app.

5. Tamara: While primarily known as a Buy Now, Pay Later (BNPL) platform, Tamara is evolving into a broader digital payments solution for e-commerce transactions. Launched in 2020, Tamara has quickly gained popularity by offering consumers the ability to split payments into interest-free installments, with over 4 million users as of 2024.

At Seamless KSA 2024, Tamara will announce its plans to integrate mobile wallet functionality into its platform, allowing users to store funds, make direct payments, and manage their finances more effectively. Abdulmajeed Alsukhan, CEO of Tamara, emphasized the company’s vision, stating, “We are committed to providing consumers with flexible and innovative payment solutions. Expanding into digital banking services will allow us to offer even greater value to our users, enhancing their shopping and financial experience.”

The Future of Mobile Wallets in Saudi Arabia

The future of mobile wallets in Saudi Arabia looks promising, with these platforms set to expand their offerings and play an even greater role in the Kingdom’s financial ecosystem. As mobile wallets continue to evolve, several trends are expected to shape their development:

1. Integration of Financial Services: Mobile wallets are expected to integrate a wider range of financial services, from loans and credit products to investment options and insurance. This will transform mobile wallets from simple payment tools into comprehensive financial management platforms, allowing users to handle all aspects of their financial lives in one place.

For instance, STC Pay has already begun offering micro-loans to users, and other platforms are expected to follow suit by introducing similar products. By providing access to credit, savings, and investment tools, mobile wallets will empower consumers with greater financial flexibility and security.

2. Expansion of Cross-Border Payments: As Saudi Arabia’s economy becomes more interconnected with the global market, mobile wallets are likely to expand their cross-border payment capabilities. Platforms like STC Pay and Tamara are already offering international remittance services, but the scope of cross-border payments is expected to grow further, providing users with faster, cheaper, and more secure ways to send money abroad.

3. Enhanced Security and Blockchain Integration: With cybersecurity being a growing concern, mobile wallet providers are expected to invest heavily in advanced security features such as blockchain technology, biometric authentication, and AI-driven fraud detection. These measures will enhance the trust and safety of mobile wallets, encouraging more users to adopt digital payment solutions.

Finally, the rise of mobile wallets in Saudi Arabia is not just transforming how people pay for goods and services; it is fundamentally reshaping the country’s entire financial ecosystem. As mobile wallets continue to expand their services, integrating financial products and offering seamless cross-border transactions, they will play an even more significant role in the digital banking landscape. With Vision 2030 as a guiding force, Saudi Arabia’s journey towards becoming a cashless society is well underway, and mobile wallets are at the heart of this transformation.

Kholoud Hussein 

Seamless KSA 2024 is at the forefront of showcasing retail tech startups that are revolutionizing the industry through AI, IoT, and blockchain technologies. As Saudi Arabia rapidly embraces Vision 2030’s economic diversification and digital transformation goals, retail tech startups are playing a critical role in reshaping how businesses engage with consumers and manage their operations. These emerging startups drive innovation across the retail ecosystem, enhance customer experiences, optimize supply chains, and improve overall efficiency.

At Seamless KSA 2024, several Saudi retail tech startups are leading the charge with AI-powered solutions that personalize the shopping experience. Startups like Sary are utilizing AI algorithms to provide smart product recommendations and predictive analytics, allowing retailers to understand consumer preferences better and anticipate demand. These solutions enable businesses to optimize inventory management and improve sales by offering tailored recommendations, ultimately boosting customer satisfaction.

Additionally, IoT is becoming an integral part of the retail landscape, as showcased by startups like Tamara. By leveraging IoT technology, Tamara is transforming how retailers track inventory, monitor supply chains, and automate warehouse operations. Real-time data from IoT sensors helps businesses reduce waste, streamline logistics, and ensure products are always available, enhancing the operational efficiency of retail businesses in Saudi Arabia.

Moreover, blockchain technology is gaining traction among retail tech startups for its ability to enhance transparency and security in transactions. Platforms like Ajar are using blockchain to build trust in digital payments and ensure the authenticity of transactions. By integrating blockchain, startups are also improving supply chain transparency, enabling consumers to trace the journey of products from source to shelf.

Seamless KSA 2024 is not only highlighting these innovative technologies but also fostering an ecosystem that encourages collaboration between startups, investors, and established retailers. By supporting the next generation of retail tech startups, the event is helping to reshape the future of retail in Saudi Arabia, driving growth, and ensuring that businesses can thrive in an increasingly digital and connected world.