Regulation, more often than not, is seen as a hindrance to innovation, but in Saudi Arabia, its financial authorities have incentivised native and international companies to comply in order to achieve innovation, in more ways than one.
Saudi Arabia has made no secret of its ambition to diversify its economy and elevate its global standing.
The Kingdom has invested significantly to position itself as a major sporting hub, overhauled its visa policies to attract longer term tourists, and accelerated efforts to completely transform its digital payment infrastructure.
All of this forms part of Saudi Vision 2030, a government initiative designed to modernise the country, reduce its dependence on oil and establish itself as a destination for investment, entertainment and sport.
A core pillar of this strategy is the drive to create a 70% cashless society by 2030. Data from the Saudi Arabia Monetary Authority (SAMA) shows online transactions made via the national payments network Mada rose by nearly 80% year-on-year last July. As in many Western markets, much of this growth is being fuelled by younger, digitally native consumers.
Domestic payment firms are accelerating that shift. STC Pay grew its user base to over 12 million in 2024 and now holds a 26% share of the digital wallet market.
The Kingdom’s rapid digital transformation has also drawn strong interest from global players. While Mada remained the dominant method in 2024, Apple Pay and Google Pay have surged in popularity, according to Checkout.com research.
“Walk into a shop in Riyadh or Jeddah today, it’s almost unusual to see cash change hands,” says Nauman Hassan, MENA Regional Director for Paymentology.
An international hub for leading firms
As Apple and Google recognised early on, Saudi Arabia’s push towards a cashless society under Vision 2030 has created one of the world’s most attractive markets for digital payments. Apple Pay, now live in more than 100 countries and embedded into every iPhone, has quickly become a leading wallet option for Saudi consumers.
But despite the strong appetite for digital payments, entering the Saudi market is not as straightforward as turning on a global product. The Ministry of Investment (MISA) requires international firms to pass a formal licensing process, which includes risk assessments and financial disclosures, before they can operate as either a local LLC or a branch office.
“Clearer regulatory pathways have made it faster and less costly for global players to establish operations in Saudi,” says Hassan.
Those simplified pathways have accelerated the arrival of major financial brands. Western Union’s $200m investment into STC Pay in 2020, alongside expansions from Mastercard Gateway and Visa’s Global Innovation Centre in Riyadh, underline the growing momentum among international firms looking to scale in the Kingdom’s fast-evolving payments landscape.
“For Paymentology, this environment is ideal,” says Hassan. “We often say: if a solution works in Saudi, it’s ready for the wider region. That mix of scale, speed, and ambition is why global-local collaboration here is uniquely powerful.”
Nurturing homegrown BNPL talent
While global giants like Visa and Mastercard have drawn to Saudi Arabia’s fast-maturing digital market, the Kingdom has also built an infrastructure which allows its home-grown fintechs to scale rapidly. Two of the standout success stories are Tamara and Tabby – Buy Now, Pay Later (BNPL) firms – which have capitalised on the method’s explosive growth in Western markets.
“Saudi Arabia’s payment regulations, led by SAMA, have been a catalyst for growth”
Tamara processed 43.3 million transactions in 2024, a y-o-y increase of 178%, with daily volumes doubling to 120,000. Tabby posted similarly strong results, recording an annual volume growth rate of 67%, outpacing even US market leader Affirm within the country.
While markets like the US and UK are still struggling to formalise regulatory frameworks for BNPL, SAMA moved early.
“Saudi was one of the first markets in the world to move from pilots to a full regulatory framework, ensuring the sector grows responsibly while meeting huge demand from consumers (BNPL is now the preferred payment option for Saudi shoppers),” explains Hassan.
Under SAMA’s rules, BNPL firms must hold at least SAR 5m in capital, secure the appropriate licences, and meet strict Saudisation requirements – employing 50% Saudi nationals, rising to 75% each year.
That push to develop domestic talent and capability has also enabled SaaS platforms like Shahbandr to scale within the Kingdom’s increasingly digital economy.
“Saudi Arabia’s payment regulations, led by SAMA, have been a catalyst for growth, they’ve encouraged innovation, built consumer trust, and licensed new players to expand the ecosystem,” says Shady Abdelshaheed, Co-Founder and CEO of Shahbandr.
“This has made digital payments more secure and accessible.”
AI: The next regulatory obstacle
Saudi Arabia has used regulation as a strategic lever to consolidate its digital payments sector, often moving faster than major Western markets. Yet as the Kingdom approaches the final year of Vision 2030, it now faces a regulatory challenge with no global blueprint to follow: artificial intelligence.
Even so, work is already underway. The National Strategy for Data and Artificial Intelligence (NSDAI) and the Saudi Data and Artificial Intelligence Authority (SDAIA) are developing ethical guidelines for AI adoption, while the Personal Data Protection Law introduced in September 2023 sets rules for how automated technologies handle personal information.
These developments come as AI-enabled shopping accelerates across the Kingdom, with consumers increasingly relying on chatbots and automated support during online purchases. The surge in agentic commerce, driven by major investments such as Amazon Web Services’ $5bn commitment to Saudi-based HUMAIN to build a national “AI Zone”, is rapidly reshaping expectations around payments, retail and digital services.
Abdelshaheed believes AI is now poised to become a transformative force in Saudi Arabia’s fintech evolution.
“From real-time fraud detection to personalised checkout flows, AI makes payments safer, smarter, and more seamless. Saudi-based companies can get ahead by embedding AI directly into their platforms, using predictive analytics and automated compliance to give SMEs tools that match global leaders.
“With The Kingdom’s fast-moving fintech ecosystem and Vision 2030 support, Saudi Arabia has a unique chance to leapfrog other regions and set the standard for AI-powered payments.”
Digital currencies can not be ignored either
Like many countries, Saudi Arabia is watching the fast-moving digital currency economy closely as global banks and policymakers rush to respond to surging interest. Yet when it comes to digital assets, the Kingdom lags not only behind major Western markets but also its regional neighbours.
The United Arab Emirates (UAE) has set the benchmark through its Virtual Asset Regulation Authority (VARA), which has been lauded for its transparent, fully defined guidelines for both domestic and international digital asset companies. As a result, exchanges such as Crypto.com, Coinbase and Bitget have made the UAE a core market and continue expanding product lines for local users.
Saudi Arabia, by contrast, has taken a more cautious approach. While SAMA permits limited crypto mining within dedicated data centres, it has not introduced a legal framework for crypto or digital asset trading, and has repeatedly stated crypto trading remains prohibited until such regulation exists.
That stance may be shifting. In June 2025, SAMA and the Capital Market Authority launched a joint initiative to explore digital currency use cases tied to financial stability, with a particular focus on stablecoins and their potential role in modernising domestic payments.
Hassan adds that the central bank is now “potentially preparing a framework to bring blockchain-based payments into the mainstream, under clear, well-supervised rules.”
Regulation is the line in the Saudi sand
Summarising his thoughts, Hassan argues that in Saudi Arabia “regulation isn’t holding fintechs back, it’s pulling them forward,” aligning with the ambitions of Vision 2030.
“When regulators don’t just react to trends but shape them, you know it’s a market worth investing in,” adds Hassan. “Saudi Arabia has created the right mix of innovation and oversight, and that’s why it’s pulling ahead as a global payments leader.”
While regulation is often framed as a barrier to innovation in other emerging fintech hubs, Saudi Arabia presents a different case. After years studying the successes and failures of global payment frameworks, the Kingdom has been able to build its own model with fewer missteps and clearer priorities.
This places Saudi Arabia in a strong competitive position. If markets such as the UK continue to hesitate over crypto regulation, or if the US and EU remain split on how to govern AI, the Kingdom could gain an even larger share of the global fintech and payments landscape.
With the 2030 milestone now just four years away, SAMA and other financial authorities appear on track to become central players in the narrative of Saudi Arabia’s transformation, and are likely to earn significant credit if the country’s digital ambitions are realised.
