The Saudi Central Bank (SAMA) has issued ‘Rules for regulating buy now pay later (BNPL) companies’, as part of its role in supervising and controlling BNPL companies.
SAMA said in a statement that the move reflects SAMA’s continuous efforts to develop the financial sector as a whole and empower the Fintech sector in particular.
Under these rules, BNPL 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 rules aim to regulate the licensing of BNPL companies and set minimum standards and procedures required to offer BNPL services. They will contribute to the growth and sustainability of the sector while safeguarding consumers’ rights.
“The rules include various provisions related to licensing requirements, internal regulatory measures, such as policies and procedures, information security standards, and measures to combat financial crimes,” as per the statement.
The regulatory obligations designed to safeguard consumers, and establish boundaries for activities and credit, as well as provisions pertaining to supervision and compliance are also among the new rules.
The draft rules were published earlier for public consultation, and relevant suggestions and observations were taken into consideration in the final version.
According to the SAMA statement, “The license shall be valid for five years and may be renewed by SAMA upon the BNPL company’s request. Such request must be submitted in writing using the form designated by SAMA, at least three months before the expiry date of the license.”
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