Financial Cards in Saudi Arabia
Euromonitor International's Financial Cards in Saudi Arabia report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
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Tables: 96 | Publication date: Mar 2008
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- Get insight into trends in market performance
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Product coverage
Financial cards in circulation; Transactions
Executive summary
Consumer Spending and Real Estate Boom Support Financial Cards
Saudi Arabia is an emerging economy, and has grown considerably over the last two decades. Inflation remained low while income levels increased significantly. In addition, Saudi Arabia is planning to build 1.5 million new houses by 2010. Improved economic conditions raised living standards for most middle and upper class residents in Saudi Arabia, and translated into higher consumer spending through the use of financial cards. The new middle class was willing to spend its freshly found wealth by equipping new homes with expensive necessities, as well as luxury items. As a result of this attitude towards spending, the penetration levels of financial cards increased significantly since it was the best alternative to cash.
Transition from Cash-based Society to Card-based
Traditionally, Saudi Arabia was a cash-oriented society. However, there were intensive efforts on the part of the Saudi government to encourage non-cash payments. The government invested billions of Saudi riyals to provide a sophisticated technological infrastructure to facilitate non-cash payments and support enhanced electronic banking services. In addition, it opted for direct payment of salaries into employees' bank accounts to encourage the banking habit. The private sector followed the government's initiative in this respect. These measures allowed financial institutions to increase their customer bases, as they were able to offer their products – especially debit, credit and charge cards – to their existing account holders. This raised awareness of card usage as a better option to cash.
Higher Penetration Levels for Financial Cards Through Co-branding
Saudis spent millions of riyals using their credit cards during the summer vacation of 2007. This was partly due to co-branded credit cards. Banks planning to issue co-branded credit cards were looking to partner with businesses in areas such as travel and tourism, petrochemicals, supermarkets/hypermarkets, fast food chains, entertainment, and airlines. Saudis are frequent travellers, and the use of financial cards significantly increases during summer vacations. Co-branding with airlines, therefore, gave banks the opportunity to target these regular travellers with special promotions. Shopping for sophisticated electronics also increased. This resulted in increased use of credit and charge cards that allowed consumers to pay by easy instalments, sometimes with no interest charged for one year.
Islamic Compliant Cards Boosts Financial Cards
Saudi Arabia applies the Islamic Shari'a law. This prohibits the charging of interest. A complex system of Islamic banking products and services compliant with Islamic Shari'a was developed alongside conventional banking operations. It is structured on the profit-and-loss sharing arrangements allowed by Islamic laws to finance payments instead of the principle of interest. The most popular card was the charge card that is in compliant with Islamic principles.
Mega Shopping Malls Promote Financial Cards
Saudi Arabia leads the Gulf Cooperation Council (GCC) countries in the use of credit and debit cards. It has also overtaken in ATM withdrawals in some parts of the region. The Kingdom of Saudi Arabia registered strong growth in the use of credit and debit cards against purchases in shopping malls, supermarkets/hypermarkets and high-end outlets. Saudi cardholders – the region's largest users of non-cash payments – generated approximately one-third of the Gulf Cooperation Council's total sales.
Table of contents
FINANCIAL CARDS IN SAUDI ARABIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Consumer Spending and Real Estate Boom Support Financial Cards
Transition from Cash-based Society to Card-based
Higher Penetration Levels for Financial Cards Through Co-branding
Islamic Compliant Cards Boosts Financial Cards
Mega Shopping Malls Promote Financial Cards
KEY TRENDS AND DEVELOPMENTS
Shari'a-compliant Cards Boost Financial Cards
Increased Consumer Spending with Financial Cards Due to Higher Disposable Income
New Housing Boosts Usage of Financial Cards for Home Furnishing, Appliances and Electronics
Plastic Money Becomes the Preferred Method of Payment
Borrowing on the Rise Due to Increase in Spending
Higher Penetration Levels for Financial Cards Through Co-branding
Increasing Banked Population Promotes Financial Cards
Large Retailers Provide Recreational Shopping that Increases Usage of Financial Cards
OPERATING ENVIRONMENT
Consumer Credit and Lending
Issuer Fraud
Acquirer Fraud
E-commerce
M-commerce
ATM and POS Terminals
Cash Withdrawal vs Card Purchases
Governmental Regulation and Legislation
MARKET INDICATORS
Table 1 Number of POS Terminals 2004-2007
Table 2 Number of ATMs 2004-2007
Table 3 Disposable Income 2002-2007
Table 4 Consumer Credit 2002-2007
Table 5 Value Lost to Fraud 2002-2007
MARKET DATA
Table 6 Financial Cards: Transactions 2002-2007
Table 7 Financial Cards: Value 2002-2007
Table 8 Financial Cards: Number of Cards in Circulation 2002-2007
Table 9 Financial Cards: Number of Accounts 2002-2007
Table 10 Domestic versus Foreign Spend 2007
Table 11 Card Expenditure by Sector 2007
Table 12 Card Expenditure by Location 2007
Table 13 Financial Cards: Number of Internet Transactions 2002-2007
Table 14 Financial Cards: Internet Transaction Value 2002-2007
Table 15 Financial Cards: Number of Cards by Issuer 2002-2006
Table 16 Financial Cards: Number of Cards by Operator 2002-2006
Table 17 Financial Cards: Point of Sale Transactions by Acquirer 2002-2006
Table 18 Financial Cards Forecast: Transactions 2007-2012
Table 19 Financial Cards Forecast: Value 2007-2012
Table 20 Financial Cards Forecast: Number of Cards in Circulation 2007-2012
Table 21 Financial Cards: Forecast Number of Accounts 2007-2012
Table 22 Financial Cards Forecast: Number of Internet Transactions 2007-2012
Table 23 Financial Cards Forecast: Internet Transaction Value 2007-2012
DEFINITIONS
Cards by Type
Cardholder Behaviour
Card Expenditure by Sector
Value Lost to Card Fraud
Consumer Credit
Market Background
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - SAUDI ARABIA
AL RAJHI BANKING & INVESTMENT CORP - FINANCIAL CARDS - SAUDI ARABIA
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Al Rajhi Banking & Investment Corp: Key Facts
Summary 3 Al Rajhi Banking & Investment Corp: Operational Indicators 2004-2006
COMPANY BACKGROUND
COMPETITIVE POSITIONING
NATIONAL COMMERCIAL BANK - FINANCIAL CARDS - SAUDI ARABIA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 National Commercial Bank (NCB): Key Facts
Summary 5 National Commercial Bank: Operational Indicators 2004-2006
COMPANY BACKGROUND
COMPETITIVE POSITIONING
RIYADH BANK - FINANCIAL CARDS - SAUDI ARABIA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 Riyadh Bank: Key Facts
Summary 7 Riyadh Bank: Operational Indicators 2004-2006
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SAMBA FINANCIAL GROUP - FINANCIAL CARDS - SAUDI ARABIA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 SAMBA Financial Group: Key Facts
Summary 9 SAMBA Financial Group: Operational Indicators 2004-2006
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SAUDI BRITISH BANK - FINANCIAL CARDS - SAUDI ARABIA
STRATEGIC DIRECTION
KEY FACTS
Summary 10 Saudi British Bank (SABB): Key Facts
Summary 11 Saudi British Bank: Operational Indicators 2004-2006
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SMART CARDS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 24 Smart Cards Sector Performance: 2002-2007
Table 25 Smart Cards Sector Performance: % Growth 2002-2007
Table 26 Smart Cards: Memory vs Microprocessor 2004-2007
Table 27 Smart Cards: Contact vs Contactless 2004-2007
Table 28 Smart Cards: Forecast Sector Performance: 2007-2012
Table 29 Smart Cards: Forecast Sector Performance: % Growth 2007-2012
ATM TRANSACTIONS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 30 ATM Cards Sector Performance: 2002-2007
Table 31 ATM Cards Sector Performance: % Growth 2002-2007
Table 32 ATM Cards: Forecast Sector Performance: 2007-2012
Table 33 ATM Cards: Forecast Sector Performance: % Growth 2007-2012
DEBIT TRANSACTIONS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 34 Debit Cards Sector Performance: 2002-2007
Table 35 Debit Cards Sector Performance: % Growth 2002-2007
Table 36 Debit Cards: Number of Cards by Issuer 2002-2006
Table 37 Debit Cards: Number of Cards by Operator 2002-2006
Table 38 Debit Cards Transactions by Acquirer 2002-2006
Table 39 Debit Cards Transaction Value by Operator 2002-2006
Table 40 Debit Cards: Forecast Sector Performance: 2007-2012
Table 41 Debit Cards: Forecast Sector Performance: % Growth 2007-2012
CREDIT CARD TRANSACTIONS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 42 Credit Cards Sector Performance: 2002-2007
Table 43 Credit Cards Sector Performance: % Growth 2002-2007
Table 44 Personal Credit Cards Sector Performance: 2002-2007
Table 45 Personal Credit Cards Sector Performance: % Growth 2002-2007
Table 46 Corporate Credit Cards: Sector Performance: 2002-2007
Table 47 Corporate Credit Cards: Sector Performance: % Growth 2002-2007
Table 48 Credit Cards: Number of Cards by Issuer 2002-2006
Table 49 Credit Cards: Number of Cards by Operator 2002-2006
Table 50 Credit Cards Transactions by Acquirer 2002-2006
Table 51 Credit Cards Transaction Value by Operator 2002-2006
Table 52 Personal Credit Cards Transactions by Acquirer 2002-2006
Table 53 Personal Credit Cards Transaction Value by Operator 2002-2006
Table 54 Corporate Credit Cards Transactions by Acquirer 2002-2006
Table 55 Corporate Credit Cards Transaction Value by Operator 2002-2006
Table 56 Credit Cards: Forecast Sector Performance: 2007-2012
Table 57 Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 58 Personal Credit Cards: Forecast Sector Performance: 2007-2012
Table 59 Personal Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 60 Corporate Credit Cards: Forecast Sector Performance: 2007-2012
Table 61 Corporate Credit Cards: Forecast Sector Performance: % Growth 2007-2012
CHARGE CARD TRANSACTIONS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 62 Charge Cards Sector Performance: 2002-2007
Table 63 Charge Cards Sector Performance: % Growth 2002-2007
Table 64 Personal Charge Cards Sector Performance: 2002-2007
Table 65 Personal Charge Cards Sector Performance: % Growth 2002-2007
Table 66 Corporate Charge Cards: Sector Performance: 2002-2007
Table 67 Corporate Charge Cards: Sector Performance: % Growth 2002-2007
Table 68 Charge Cards: Number of Cards by Issuer 2002-2006
Table 69 Charge Cards: Number of Cards by Operator 2002-2006
Table 70 Charge Cards Transactions by Acquirer 2002-2006
Table 71 Charge Cards Transaction Value by Operator 2002-2006
Table 72 Personal Charge Cards Transactions by Acquirer 2002-2006
Table 73 Personal Charge Cards Transaction Value by Operator 2002-2006
Table 74 Corporate Charge Cards Transactions by Acquirer 2002-2006
Table 75 Corporate Charge Cards Transaction Value by Operator 2002-2006
Table 76 Charge Cards: Forecast Sector Performance: 2007-2012
Table 77 Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 78 Personal Charge Cards: Forecast Sector Performance: 2007-2012
Table 79 Personal Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 80 Corporate Charge Cards: Forecast Sector Performance: 2007-2012
Table 81 Corporate Charge Cards: Forecast Sector Performance: % Growth 2007-2012
PRE-PAID CARD TRANSACTIONS IN SAUDI ARABIA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 82 Pre-paid Cards Sector Performance: 2002-2007
Table 83 Pre-paid Cards Sector Performance: % Growth 2002-2007
Table 84 Pre-paid Cards: Forecast Sector Performance: 2007-2012
Table 85 Pre-paid Cards: Forecast Sector Performance: % Growth 2007-2012