The value of fintech transactions in Saudi Arabia increased at a rate of over 18 per cent each year between 2017 and 2019, reaching over $20bn by the end of 2019. Research by Fintech Saudi reveals that the number of operating fintech startups has tripled in a year from 20 in 2019 to 60 this year in the kingdom.
Payments account for two-thirds of the market and almost 98 per cent of the userbase. It is followed by personal finance which comprises over 30 per cent of the fintech transaction values.
The number of payments made through the SADAD electronic payment system has increased by a CAGR of 11 per cent between 2016-19 to reach 270 million transactions in 2019. The value of these transactions has grown by a CAGR of 24 per cent in the corresponding period to reach SAR 445bn.
The number of smartphone payment transactions in Saudi Arabia increased by 352 per cent to 19.7 million in April 2020, compared to 4.4 million in April 2019.
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The fintech market in Saudi Arabia is expected to reach transaction values of over $33bn by 2023. Payments are likely to continue to lead the market share followed by personal finance.
Online insurance sales account for a relatively small proportion of the market in Saudi Arabia. However, with new regulations on insurance aggregation coming in force, the insurtech sector is poised for higher growth in the country.
Significant progress has been made in payments in the past year with the launch of Apple Pay, the establishment of Saudi Payments and the release of a payments regulation.
Fintech Saudi has launched several initiatives to support the fintech industry including the Fintech Ecosystem Directory and Fintech Jobs Portal to support fintech companies, the Fintech Regulatory Assessment Tool to provide greater regulatory clarity and the Fintech Data & Research Initiative to support data-driven innovation in fintech.