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SAMA issues rules for regulating BNPL companies

Monday 18 December 2023 14:41 CET | News

Saudi Central Bank has announced the issuance of Rules for Regulating Buy Now Pay Later Companies, as part of its role in supervising the BNPL companies.

 

According to the official announcement, this decision reflects The Saudi Central Bank's (SAMA's) continuous efforts to develop the financial sector as a whole as well as empower the fintech sector in particular.

Under these rules, the Buy Now Pay Later activity is defined as a type of financing that allows a consumer to purchase goods or services without a term cost payable by the consumer.

The Saudi Central Bank has announced the issuance of Rules for Regulating Buy Now Pay Later Companies, as part of its role in supervising the BNPL companies.

The aims of the rules are to regulate the licencing of the Buy Now Pay Later companies and set minimum standards and procedures required to offer BNPL services. Moreover, the development of these rules is set to contribute to the growth and sustainability of the sector while, at the same time, safeguarding consumers' rights. 

The rules include various provisions related to licencing requirements, internal regulatory measures such as internal policies and procedures, information security standards, and measures to combat financial crimes. Additionally, regulatory obligations designed to safeguard consumers, and establish boundaries for activities and credit, as well as provisions pertaining to supervision and compliance were included in the new rules. 

The official announcement also states that the draft rules were published earlier for public consultation, where relevant suggestions and observations were considered in the final version.  

Recent developments from Saudi Central Bank 

In December 2023, The Saudi Central Bank allowed Jeel Pay to provide Buy Now Pay Later solutions in the country. Following this development, Jeel Pay joined the ranks of seven authorised companies providing BNPL services in Saudi Arabia, contributing to a total of 58 licensed finance companies in the country.  The aim was to boost operational efficiency and introduce innovative financial solutions, fostering financial inclusion within the Saudi Arabian market. 

In September 2023, SAMA announced the plan to issue a new regulatory framework for Open Banking in Q4 2023, for the payment origination services. Following this announcement, SAMA aims to expand the range of improved and efficient financial solutions available in the market, as well as to strengthen the country’s commitments and focus on benefiting from multiple Open Banking opportunities. As the percentage of adult individuals who have a bank account or an electronic wallet stood at approximately 94% by the end of 2022, the Saudi Central Bank contributed to the process of enabling financial planning and savings for customers and individuals, as well as in the procedure of reducing the dependence on cash. This took place by developing new technical tools and solutions and by providing supporting offerings at the same time. 

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Keywords: BNPL, regulation, ecommerce, financial services, compliance
Categories: Payments & Commerce
Companies: Saudi Central Bank
Countries: Saudi Arabia
This article is part of category

Payments & Commerce

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Saudi Central Bank

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