The Saudi Central Bank (SAMA) has officially introduced a set of rules aimed at regulating “Buy Now, Pay Later” (BNPL) services, marking a significant step in overseeing and controlling this rapidly growing sector.
This development, as stated in a recent SAMA press release, is part of the bank’s ongoing efforts to enhance the overall financial sector, with a specific focus on empowering the Fintech industry.
The newly issued “Rules for regulating buy now pay later (BNPL) companies” define BNPL activity as a type of financing that enables consumers to purchase goods or services immediately without any term cost payable upfront.
This move by SAMA underscores the bank’s commitment to fostering a robust financial environment while ensuring consumer protection and sector sustainability.
Central to these rules is the regulation of the licensing process for BNPL companies. The regulations set forth minimum standards and procedures that companies must adhere to in order to offer BNPL services.
These standards are designed to ensure the growth and sustainability of the BNPL sector, while also prioritizing the protection of consumer rights.
The comprehensive set of provisions includes various aspects such as licensing requirements, internal regulatory measures (including policies and procedures), information security standards, and strategies to combat financial crimes.
Additionally, the rules delineate regulatory obligations specifically crafted to protect consumers. These encompass establishing clear boundaries for activities and credit limits, along with provisions related to supervision and compliance within the sector.
In the formulation of these rules, SAMA engaged in a consultative process, releasing a draft for public comment. The final version of the rules incorporates feedback and suggestions from this public consultation, reflecting a collaborative approach in the regulatory process.
This regulatory framework is expected to bring greater transparency and structure to the BNPL sector in Saudi Arabia. By setting clear guidelines and standards, SAMA aims to ensure that BNPL services are provided in a responsible and sustainable manner, benefiting both consumers and the industry at large.
The implementation of these rules is a key step in SAMA’s broader strategy to modernize and diversify the Saudi financial ecosystem, positioning the kingdom as a leading player in the global Fintech landscape.