SAMA Sets Regulatory Framework for Buy Now, Pay Later Companies
The Saudi Arabian financial technology industry is set for expansion as Saudi Central Bank (SAMA) establishes guidelines for "buy now, pay later" (BNPL) firms.
On December 17, SAMA introduced regulations to govern licensing and set standards for BNPL enterprises, intending to promote sector growth and protect consumer rights.
BNPL services are defined as interest-free financing options that enable consumers to defer payments for purchases. SAMA has mandated licensing requirements, internal policy regulation, information security protocols, and anti-financial crime measures for BNPL businesses. The initial capital requirement for such a company is SR5 million ($1.3 million), adjustable by SAMA if necessary.
The rules stipulate that at least 50% of employees in new BNPL companies must be Saudi nationals, a quota that extends across all organizational levels. Regulations have also been set in place to protect consumers, define the scope of operations and credit, and enforce supervision and compliance.
To ensure adherence to the regulations, SAMA will perform inspections, meet with staff, and review company records and systems. These policies coincide with the rise of BNPL services in Saudi Arabia, highlighted by the recent licensing of Jeel Pay, marking the seventh BNPL company and increasing the total to 58 licensed finance firms in the Kingdom.
These developments contribute to the Vision 2030 objectives of the National Fintech Strategy. The aim is to have 525 fintech companies generating over SR13.3 billion for the GDP and creating 18,000 jobs. SAMA is committed to driving innovation, inclusivity, and accessibility within the financial sector.
BNPL services are defined as interest-free financing options that enable consumers to defer payments for purchases. SAMA has mandated licensing requirements, internal policy regulation, information security protocols, and anti-financial crime measures for BNPL businesses. The initial capital requirement for such a company is SR5 million ($1.3 million), adjustable by SAMA if necessary.
The rules stipulate that at least 50% of employees in new BNPL companies must be Saudi nationals, a quota that extends across all organizational levels. Regulations have also been set in place to protect consumers, define the scope of operations and credit, and enforce supervision and compliance.
To ensure adherence to the regulations, SAMA will perform inspections, meet with staff, and review company records and systems. These policies coincide with the rise of BNPL services in Saudi Arabia, highlighted by the recent licensing of Jeel Pay, marking the seventh BNPL company and increasing the total to 58 licensed finance firms in the Kingdom.
These developments contribute to the Vision 2030 objectives of the National Fintech Strategy. The aim is to have 525 fintech companies generating over SR13.3 billion for the GDP and creating 18,000 jobs. SAMA is committed to driving innovation, inclusivity, and accessibility within the financial sector.
Translation:
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