RIYADH: Saudi Arabia’s spending through point-of-sales terminals in August increased 10 percent to SR54.6 billion ($14.56 billion) compared to the year-ago period, according to the apex bank.
The Saudi Central Bank, also known as SAMA, said that the key objective of the Financial Development Program is to promote digital payment solutions in transforming the Kingdom into reaching 70 percent non-cash payments by 2025.
Mobile phone payments recorded an 18 percent growth in August to SR19.5 billion compared to SR16.6 billion in the corresponding period last year.
On the other hand, purchases using cards in August touched SR31.7 billion — almost SR2 billion over the same month last year.
E-commerce transactions using MADA cards in August surged 27.4 percent to SR14.4 billion against the respective month in 2022.
The Kingdom’s goal to transition to a cashless society encourages the use of electronic payment methods, including MADA cards.
MADA cards are often used for receiving government payments, including salaries, social benefits and subsidies. The digitization of government payments has further boosted card usage and sales value.
MADA cards are commonly used at ATMs for cash withdrawals and balance inquiries. As the number of ATMs increases, so does the usage of MADA cards.
However, the SAMA’s ATM statistics reveal that the teller machines fell by 274 compared to August 2022, showing a negative trend looming for the past six months.
While the gain in MADA card utility may seem counterintuitive to the decline in ATMs, several factors emerging in the country’s financial landscape can explain the trend.
The increase in MADA card usage may be driven by an increasing number of individuals and businesses shifting toward electronic payments, including online purchases, bill payments and fund transfers, which reduces the need for physical ATM withdrawals.
Another factor could be the prevalence of contactless payment technology that allows individuals to make quick and secure transactions using their MADA cards without physically inserting them into a card reader.
This aspect has become popular for small-value purchases, reducing the reliance on ATMs.
While the number of ATMs may decrease, the overall trend suggests a shift toward digital and card-based payments whereby Saudis are increasingly comfortable with electronic transactions and use the teller machines less frequently for cash withdrawals.