The in-depth study, which is part of Visa’s ongoing drive to build e-commerce in the region, identifies current levels of e-Commerce performance and potential by assessing the breadth of existing research undertaken in the region.

It covers trends, data and forecasts concerning e-commerce in KSA and the wider GCC as part of a world-class comparison to key markets.

With one of the fastest growing rates of Internet use in the Middle East, B2C (Business to Consumer) e-Commerce spending in Saudi Arabia reached $520 million in 2010, and is expected to increase to $800 million this year. Looking ahead, KSA’s high Internet penetration rate, which according to ITU is at 41 percent or 11 million users, should spur Internet services to grow, including e-commerce.

Saudi is the second largest market for e-commerce in the region, next to the UAE (with nearly $2 billion spent on online shopping), and followed by Qatar ($375 million), Kuwait ($280 million), Bahrain ($175 million) and Oman ($70 million).

Saudi Arabia was one of the earliest to adopt and implement e-payment systems in the region. In October 2004, the Saudi Arabian Monetary Authority (SAMA) launched SADAD payment system (SADAD) to serve as the electronic bill-payment system for the Kingdom.

Customers can pay bills through SADAD through standard banking channels, such as ATMs and online and phone banking.

Many companies use the SADAD system including some of the largest in the country: Saudi Telecom Company, Saudi Electricity Company, Mobily (mobile service provider), Saudi Post (the national courier) and Samba Financial Group (one of the largest private banks).

Last year, Saudi Post launched an online market initiative (e-Mall) that will eventually feature a range of merchants, from local artisans to major stores.

The organization said that in 2009 about 5 million e-commerce transactions took place in the kingdom, and Saudi Post wanted to encourage and capitalize on the growth of electronic trade.

Meanwhile, private sector involvement in the development of e-Commerce in the kingdom got a major boost when Google unveiled a plan to get small businesses online, starting in Saudi Arabia, with plans to expand throughout the GCC.