From cash to contactless: Structural break evidence from Saudi Arabia’s POS transaction patterns

Point-of-sale (POS) transactions are considered one of the fundamental components of retail financial systems. The performance of the POS service network relies heavily on a reliable and secure e-banking infrastructure driven by usage patterns. In this study, we perform a structural break analysis to identify all points in the POS transaction time series where major structural behavioral shifts have occurred. We then investigated the potential sources of these shifts in the data. The analysis revealed four major shifts between 2019 and 2023. The corresponding events, such as the introduction of Apple Pay, the broader rollout of MADA’s contactless and mobile payment infrastructure, COVID-19, SAMA’s regulatory sandbox and open banking pilot projects, and structural changes in banking technology and regulation, are evident as potential drivers of these changes. These results are useful for planners doing digital infrastructure management, expansion, and investment planning, as well as performing policy formulation and responses.