The Economic Transformation of Saudi Arabia: A Digital Finance Oasis

The Kingdom of Saudi Arabia (KSA) has made remarkable strides in its economic landscape, achieving an annual GDP of $1.083 trillion in 2024, marking a 3.3% increase from the previous year. This growth positions Saudi Arabia as the second-largest economy in the Middle East and North Africa (MENA), underscoring its strategic shift from an oil-centric economy to a more diversified one. Key sectors such as sports, technology, tourism, and financial services are now at the forefront of this transformation.

Saudi Arabia’s Economic Landscape

Saudi Arabia stands as the largest economy within the Gulf Cooperation Council (GCC) and a significant player in the Middle East. With a population exceeding 36 million, the Kingdom’s economy is driven by diverse sectors, including oil and gas, petrochemicals, mining, manufacturing, construction, retail, tourism, and financial services. The Kingdom has successfully attracted multinational corporations (MNCs) through tax-friendly policies, establishing itself as a global financial hub.

After a slight GDP dip of 0.8% in 2023, Saudi Arabia rebounded in 2024, primarily due to a 4.2% surge in non-oil sectors. This shift indicates a clear transition from hydrocarbons to a future powered by innovation, technology, and services. The digital economy is a crucial component of this evolution, with projections estimating its growth to $87 billion by 2025 and $133 billion by 2030.

Saudi Vision 2030

Saudi Vision 2030 is a strategic framework aimed at reducing the Kingdom’s dependence on oil while promoting economic diversification. The initiative emphasizes digital transformation and financial inclusion, fostering a vibrant society and a dynamic economy.

Key pillars of Vision 2030 include:

Economic Diversification: The Kingdom is committed to broadening its revenue base by investing in technology, tourism, and entertainment, thereby reducing reliance on oil exports.

Digital Transformation: The Vision prioritizes the adoption of digital technologies to accelerate economic development. A cornerstone of this effort is modernizing the financial sector through digital payments and expanding access to financial services.

Central to this vision is the development of digital finance infrastructure, with e-payments surging to 79% of all retail transactions in 2024, reflecting a 12% increase over the previous year.

Advancing Digital Payments

Saudi Arabia is on a fast track toward a cashless society, having achieved a 70% non-cash transaction rate by 2023—two years ahead of its target. Several factors have contributed to this rapid progress, including a young, mobile-first population with a 97% smartphone penetration rate and robust digital infrastructure.

Programs like FinTech Saudi have been instrumental in nurturing the ecosystem and driving adoption among consumers and businesses. The real-time payment (RTP) systems have also gained traction, offering instant settlement for transactions, thereby enhancing the speed and security of digital payments.

The Rise of Mobile Wallets in Saudi Arabia

The mobile wallet landscape in Saudi Arabia is diverse, catering to various consumer needs. National platforms facilitate contactless payments linked to local bank cards, while international solutions are gaining popularity for secure transactions.

Approximately 90% of consumers used emerging payment methods like contactless wallets or money transfer apps in 2024. The growing e-commerce market and increased security measures have played significant roles in this transformation, providing financial inclusion and greater control over personal finances.

Cross-Border Payments in Saudi Arabia

Remittance flows are a cornerstone of Saudi Arabia’s financial ecosystem, particularly due to its large expatriate population. In 2024, total outward remittances reached $38.2 billion, reflecting a 14% increase from the previous year. This growth is driven by increased employment opportunities and higher disposable incomes.

As the Kingdom prepares to host the FIFA World Cup in 2034, an influx of foreign workers is expected to further accelerate remittance volumes, highlighting the need for efficient cross-border payment solutions.

Transitioning Beyond Oil-Based Industries

Saudi Arabia’s economic transformation is gaining momentum, with non-oil sectors like tourism, construction, and manufacturing driving sustained growth. In 2023, non-oil activities accounted for 50% of GDP, a record high that reflects the Kingdom’s commitment to diversifying its economy.

The Open Banking Framework, launched by SAMA in 2022, has laid the groundwork for secure data sharing between banks and licensed fintechs. This initiative has unlocked new digital products and enhanced consumer control over financial services.

The rise of neobanks—fully digital banks offering app-based financial services—has also contributed to this transformation. These institutions thrive under SAMA’s supportive regulations, improving accessibility and user experience for underserved segments.

A Digital Finance Oasis in the Middle East

Saudi Arabia’s transformation into a digital finance hub is reshaping the economic landscape of the MENA region. Guided by Vision 2030, the Kingdom has successfully diversified its economy, reducing dependence on oil through substantial investments in tourism, sports, and fintech.

The rapid adoption of digital payments and mobile wallets highlights the Kingdom’s commitment to building a cashless society and promoting financial inclusion. With a tech-savvy population, widespread broadband connectivity, and a supportive regulatory environment, Saudi Arabia is paving the way for a sustainable and prosperous future.

This year, Saudi Arabia will host Money20/20 for the first time, a landmark fintech event that signals the Kingdom’s elevated status as a regional fintech hub and a global destination for innovation in financial services.

Thunes’ Footprint in Saudi Arabia

Thunes plays a pivotal role in shaping Saudi Arabia’s payments ecosystem. With an office established in Riyadh, Thunes continues to expand its capabilities and investment in the Kingdom, enabling seamless cross-border payments to and from the region.

Operating in over 130 countries, Thunes supports more than 80 currencies and connects with 320 payment methods worldwide. Saudi Arabia’s commitment to financial inclusion and innovation has created a supportive environment for businesses and consumers, opening doors to greater economic opportunities.