According to sources, the Central Bank of Kuwait has directed local banks to issue cards that cater to both individual consumers and merchants. These cards will allow direct withdrawals and payments via points of sale (POS) and e-commerce platforms within Kuwait. Payments will be processed and stored locally, aligning with Kuwait’s digital transformation agenda and reducing banks’ reliance on international payment networks, which charge fees for interconnection.
Currently, many local bank cards bear both the “K-Net” logo and the Visa or MasterCard logo, offering customers the choice of local or international payments. In both cases, global payment networks typically charge a fee of approximately 0.03% per transaction, which is collected for simply registering the transaction on their network. This fee adds up, with the total amount paid by Kuwaiti banks to global payment companies reaching around 14 million dinars annually, based on 44.744 billion dinars in local financial payments executed last year.
The sources revealed that local banks, K-Net, and the Central Bank of Kuwait are collaborating to develop the digital infrastructure required to support a local payment system. This could involve issuing separate cards for local and international transactions, or a single card with two chips—one registered on the K-Net network for local payments and the other on Visa or MasterCard for international transactions.
In preparation for this transition, all ATMs and POS terminals will be upgraded. The move is expected to reduce Kuwait’s reliance on global payment companies and their associated fees, as these companies have declined to waive fees for local payments, citing their standardized operational procedures across all markets.
One of the key benefits of this shift is the potential to ensure the sovereignty of internal payment data while also saving on fees paid to global networks. K-Net stands to benefit from this move by generating new services and increasing its operational revenues.
Furthermore, the new cards are expected to enhance Kuwait’s financial inclusion and drive the country toward a cashless future. As part of the Kuwait National Payment System project launched by the Central Bank, the initiative will foster technological progress in payment systems and accelerate the digital transformation of Kuwait’s financial services sector. The project aims to create a robust, innovative, and interoperable infrastructure, enhancing the customer experience and enabling the development of advanced payment solutions.
The local payment system is also expected to open doors for future expansion, allowing for seamless integration with other payment systems. This will strengthen Kuwait’s competitiveness and reinforce its position as a leading digital payments hub.
Consumer spending in Kuwait rose in 2024 to 47.81 billion dinars, an increase of 4.4% compared to the previous year. Domestic spending amounted to 44.744 billion dinars, accounting for 93.5% of total spending, while spending abroad increased by 10.5% to 3.07 billion dinars.
The rise in digital transactions has been significant, with digital payments now accounting for 78.9% of total consumer spending in 2024, up from 76.5% in 2023. Point-of-sale transactions, both within Kuwait and internationally, made up the largest share of total spending, reaching 39.6%—an increase of 8% compared to the previous year, totaling 18.925 billion dinars.
This growth in digital payments reflects Kuwait’s continued shift toward a more modern, efficient, and digitally-enabled financial ecosystem.
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