Visa transactions up but cash still king in Saudi Arabia
Saudi consumers have spent nearly $14 billion in purchases via Visa cards in the first nine months of 2001, a 26 percent rise as compared to the corresponding period the year before. Visa holds around 70 percent of the plastic card market in Saudi Arabia, which accounts for the highest card expenditure in the Gulf region.
According to Visa statistics, Saudi banks issued a total of 2.13 million Visa cards between January and September 2001, a 28 percent increase from the first nine months of 2000. Almost 55 million transactions were carried out during this time, 30 percent higher than during the same period in 2000.
Nonetheless, the traditional preference for cash is still evident. Out of the total population of around 20 million in the Kingdom, only nine percent uses plastic cards as a substitute for money, of this total only a third hold credit cards. At present, there are over three million plastic cards in circulation—whether credit cards, debit cards or charged cards—accounting for a total expenditure value of nearly $24 billion.
The Kingdom is the biggest market in terms of cardholder expenditure among Visa’s Central and Eastern Europe, Middle East and Africa (CEMEA) markets, comprising 92 countries. The CEMEA is Visa’s fastest growing region, expanding at a rate of 48 percent from September 1999 to September 2000. Over a five-year period, the number of Visa cards has nearly tripled to 23 million and spending volume have risen from $8.5 billion in 1997 to more than $52 billion as of December 2001.
Compared, however, to international Visa figures, the region still has a long way to go to realize its market potential. In the year ending March 2001, $1.294 trillion worth of transactions were completed using visa products worldwide. Out the total, only $10.1 billion took place in the CEMEA region compared with $667 billion in the United States. This purchase volume was made up of 26.57 billion transactions of which 645 million executed in the CEMEA, compared to 11.6 billion in the United States.
Visa recently invested over one million dollars to create an Integrated Digital Network Exchange (IDNX) system specially designed for the Kingdom, which is Visa’s biggest market among the Gulf states. The network extends across Bahrain, Kuwait, Oman, Qatar and the UAE. The project was carried out in partnership with the Saudi Arabian Monetary Authority (SAMA) and the Saudi Telecom Company (STC), as part of a national effort to encourage the plastic card market and to improve the network of terminals and the speed of transactions. — (menareport.com)
© 2001 Mena Report (www.menareport.com)