KSA’s BNPL landscape is thriving, propelled by a young, tech-savvy population, low credit card penetration, and strong regulatory support. While BNPL players elsewhere have encountered hurdles—from funding crunches to regulatory clampdowns—Saudi Arabia’s ecosystem has proven remarkably resilient, positioning the Kingdom as a regional fintech leader.
In this edition, we’ll explore the key trends shaping BNPL in KSA. Here’s what you can expect:
- Why BNPL Has Thrived in KSA—and Why It’s Immune to Challenges Faced Elsewhere
- Key Pillars for Future Growth
- The Growth Potential—7x by 2030, Powered by Wallet Expansion
Why BNPL Has Thrived in KSA—and Why It’s Immune to Challenges Faced Elsewhere
KSA’s demographic advantage plays a pivotal role: with a median age of 32 years, consumers are more inclined to adopt digital payment solutions compared to the US or UK, whose median ages exceed 40 years. Moreover, credit card penetration in KSA sits at just 25% (in 2023) (vs. 82% in the US and 64% in the UK), driving demand for alternative credit solutions like BNPL. The government’s Vision 2030 initiative has further fueled this momentum, providing a clear regulatory framework that fosters innovation while safeguarding consumers.
Where BNPL providers in other markets have struggled with intense competition, macroeconomic headwinds, and funding shortages, Saudi Arabia has remained relatively insulated. A tightly controlled licensing regime limits the number of BNPL players, preventing margin erosion. Robust stimulus measures under Vision 2030 help stabilize the local economy, and leading KSA BNPLs—Tabby and Tamara—have each secured over USD 0.5 Bn in equity funding to support growth. Meanwhile, access to SIMAH data, Open Banking, and stringent KYC rules mitigate credit risk, ensuring sustainable operations.
Key Pillars for Future Growth
As BNPL usage matures, providers must address churn—a phenomenon where consumers migrate to new platforms or revert to traditional credit solutions. The adoption-acceleration-growth curve illustrates how BNPL customers initially embrace the product, then expand usage, but eventually look for more sophisticated offerings. Acquiring new BNPL users is generally easier; however, retention becomes more challenging once they gain access to other credit solutions—such as credit cards and loans—often shifting away from BNPL after five or six years. To retain these maturing users, BNPLs can focus on increasing merchant tie-ups, offering broader FinTech solutions, and integrating e-commerce directly into their apps and websites (moving from an affiliate model to a full marketplace model).
The Growth Potential—7x by 2030, Powered by Wallet Expansion
With massive customer acquisition already achieved, the next frontier lies in retention and wallet expansion. KSA’s BNPL market could grow nearly sevenfold between 2024 and 2030, fueled by rising private consumption. The sector’s future hinges on capturing a greater share of each consumer’s spending—beyond just e-commerce—by integrating BNPL into everyday transactions like groceries, healthcare, and travel, and offering wider set of FinTech products and services to their huge consumer base.
Looking Ahead
KSA’s BNPL story has only just begun. A young population, strong regulatory environment, and robust funding channels create fertile ground for sustained innovation. As providers enhance their offerings and consumers embrace more digital-first services, BNPL is poised to become an even more integral part of Saudi Arabia’s financial landscape—ultimately solidifying the Kingdom’s position as a global fintech powerhouse.
