Digital Wallets in Saudi Arabia: Everything You Need to Know

A digital wallet is an electronic application or service used to store and manage funds, make payments, and conduct financial transfers online or through smart devices. In the Saudi context, the digital wallet has evolved in response to the need for safer and more flexible payment methods that align with the national transformation towards financial inclusion and modern technologies. The digital wallet allows users to link their bank accounts or bank cards to smart applications, providing payment options for purchases, transfers between individuals, and payment of government and commercial bills. These wallets differ from traditional wallets in that they are intangible and managed online, relying on technologies such as two-factor authentication and encryption to ensure security. Digital wallets in Saudi Arabia are overseen by the Saudi Arabian Monetary Authority (SAMA), with some investment-related services falling under the Capital Market Authority.

Digital wallets in the Kingdom of Saudi Arabia are subject to close supervision by regulatory authorities, primarily the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority. SAMA has established a specific framework for licensing electronic payment service providers, including digital wallets, specifying capital requirements, operational robustness, and cybersecurity controls. Service providers are also required to implement stringent user identity verification measures and apply strict data encryption standards. Some digital wallet services fall under the jurisdiction of the Capital Market Authority if they are related to investment or digital assets, while most payment wallets remain under SAMA's supervision. This regulation ensures the protection of customer funds and enhances trust in the use of digital wallets within the Saudi financial system.

The Kingdom has witnessed significant growth in the use of digital wallets between 2024 and 2025. According to SAMA reports, the number of electronic payment transactions via digital wallets increased by over 60% compared to the previous year, driven by the widespread use of smartphones (99% of the population by mid-2024). The volume of digital transactions recorded an annual growth rate of between 20% and 30%, while the value of electronic transfers exceeded 1.2 trillion Saudi Riyals in 2024. The number of users is steadily rising, with STC Pay announcing over 5 million users, while estimates suggest that electronic bank wallets are used by approximately 4.5 million customers. Statistics indicate that 70% of the population has tried mobile payment at least once in 2024.

Digital wallets offer several essential advantages for consumers and businesses. For individuals, they provide speed and convenience in completing payments and transfers without the need to carry cash or plastic cards, with the ability to track spending and manage budgets easily. Some digital wallets offer rewards programs and discounts, allowing users to pay government and commercial bills or recharge phone credit from anywhere at any time. For businesses, they benefit from fast payment solutions, reduced reliance on cash, and simplified collection processes from customers. Digital wallets also support e-commerce and expand customer bases through integration with point-of-sale systems and digital platforms.

Regulatory authorities and operating companies place great importance on the security of digital wallets. Security measures include two-factor authentication, advanced data encryption, transaction limits, and monitoring of suspicious activities. Strict policies are enforced to combat money laundering and verify customer identities. Users are advised to follow security tips, such as using strong passwords, not sharing authentication codes, and regularly updating applications. Regulatory authorities reserve the right to intervene immediately if any unusual activity is suspected, enhancing confidence in the use of digital wallets.

The Saudi digital wallet market is active with three main categories of players: telecommunications companies (such as STC Pay and Mobily Pay), major local banks (such as Al Rajhi Bank, National Bank, Bank Albilad), and emerging fintech firms (such as PayTabs and WeyaPay). Telecommunications companies leverage their large customer bases and digital expertise, offering loyalty programs and integrated solutions with communication services. Banks rely on trust and regulation, providing account linking facilities and secure payment services. Fintech companies add innovation and flexibility, often entering the market through partnerships with banks or telecommunications companies.

The Saudi market features both local digital wallets (STC Pay, Mobily Pay, bank wallets) and global ones (Apple Pay, Google Pay, Samsung Pay). Global wallets allow for the storage of international payment cards and their use at supported points worldwide, while local wallets focus on integration with Saudi systems, supporting national identity, government services, and local payments. In terms of security, both rely on advanced technologies, but local wallets are subject to SAMA oversight, while global wallets are governed by the laws of their parent companies. Local wallets often provide additional benefits specific to the Saudi market, such as loyalty programs and local payment offers.

The sector has recently seen several significant developments. SAMA issued new updates for the licensing of payment service providers, and the Capital Market Authority began studying the possibilities of digital custody for securities. STC signed a partnership with Bank Al-Jazira to launch integrated digital financial services, while Mobily announced significant updates to its platform. Global companies like Apple Pay and Google Pay entered the local market, registering strong growth in the number of registered cards. On the other hand, the government launched the "Digital Payment Century" initiative to raise the percentage of digital transactions to 70%, supporting small and medium enterprises in adopting payment solutions via digital wallets. The market has also seen new investments and IPOs in fintech companies, further enhancing sector growth.

Competition in the Saudi digital wallet market is characterized by vibrancy and diversity. Telecommunications companies enjoy a competitive advantage derived from their large customer bases, while banks rely on trust and regulation. Emerging fintech firms stand out for their ability to innovate and reduce operational costs, often entering the market through strategic partnerships. Competition also includes the entry of major global companies offering advanced payment solutions. The importance of integration between payment services, promotional programs, and the speed of innovation is increasing in enhancing the position of market players. The role of regulations is crucial in maintaining a balance between consumer protection and encouraging innovation.

Opening a digital wallet requires selecting a licensed service provider (bank, telecommunications company, or fintech firm), downloading the application or registering via the official website, verifying the account by entering personal data and linking the wallet to a bank account or card, and then completing verification steps (such as SMS code or two-factor authentication). After that, the wallet can be funded and used for transfers, payments, or online shopping. The specific details may vary by provider, but all require identity verification and adherence to security standards set by SAMA.

Despite the advantages of digital wallets, there are challenges to be aware of: cybersecurity, digital fraud risks, reliance on the continuity of technical services, and data privacy protection. Regulatory authorities impose periodic security updates and set transaction limits to mitigate risks. Users are encouraged to follow protective practices such as not sharing login information or authentication codes and using only trusted applications. Other challenges include the need for user awareness of regulatory changes and the necessity to keep pace with ongoing technological developments in this sector.

Digital wallets have contributed to accelerating the growth of e-commerce in Saudi Arabia by facilitating payment processes, reducing reliance on cash, and providing secure and fast payment options. They have also helped enhance financial inclusion by providing financial services to unbanked users or those with limited accounts. Digital wallets support entrepreneurs and small businesses by enabling them to collect electronic payments easily and providing financial reports to track performance. These developments enhance Saudi Arabia's position as one of the leading markets in fintech regionally.

Forecasts indicate that the digital wallet sector in Saudi Arabia will continue to grow, supported by digital transformation policies, legislative updates, and the entry of new fintech and investment companies. The role of digital wallets is expected to expand to include deeper services such as digital asset management, direct linkage to investment in securities, and greater integration with artificial intelligence applications and blockchain technologies. Collaboration between banks, telecommunications companies, and digital platforms will also strengthen, supporting a more flexible and innovative financial environment in the Kingdom.