In Saudi Arabia, a remarkable 20 percent year-over-year growth was recorded in February for payments made via point-of-sale (POS) terminals, amounting to SR53.72 billion ($14.33 billion). This uptick is a testament to the country’s ongoing commitment to digitalization within the retail sector.
Breakdown of these expenditures places food and beverages at the forefront, absorbing 15.7 percent of the POS spending, totaling SR8.43 billion. Close behind, the restaurant and cafe segment accounted for 15 percent, with an expenditure of SR8.02 billion.
Point-of-sale systems represent the physical locations where transactions are processed, like the checkout counters in stores or when a payment card is used.
The country’s push towards a digital future is reflected in the rise of POS payments. Saudi Arabia is championing initiatives that promote sustainable urban development and a flourishing digital economy.
Significantly, over 93 percent of these sales transactions utilized near-field communication (NFC) technology via mobile devices and cards. NFC has revolutionized the concept of contactless payments in the kingdom, allowing for quick and hygienic transactions with just a tap.
The adoption rate of NFC technology is climbing as customers show a preference for swift and convenient payment methods, propelling businesses to integrate NFC into their systems. This technology not only meets consumer expectations for speed but also includes advanced security features to prevent fraud.
Recent central bank data indicated a reduction of 349 ATM machines since February 2023, while the issue of 5.4 million cards points towards a trend of transitioning from cash to digital payment methods.
Another significant rise was observed in the miscellaneous goods and services sector, which includes personal care, maintenance, and cleaning products, representing 20 percent of the total increase in POS transactions. In February alone, this sector saw a 39 percent increase in spending, reaching SR6.5 billion.
Among the different categories, miscellaneous goods saw the highest growth rate, with the hotel industry also showing a notable 28 percent increase to SR1.52 billion.
Beverages, food, and jewelry sectors also witnessed substantial growth, with increases of 23 and 21 percent respectively.
When it comes to geographical distribution, Riyadh led the pack, accounting for 34 percent of the total POS sales, followed by Jeddah at 14 percent. Riyadh’s growth from a modest population of half a million in 1972 to over 7.8 million in 2024 has transformed it into a dynamic commerce center, driving the majority of sales transactions.