Riyadh, December 17, 2023, The Saudi Central Bank (SAMA) has taken a significant step by issuing "Rules for regulating buy now pay later (BNPL) companies," as part of its supervisory role over such entities. This move is in line with SAMA's ongoing commitment to developing the financial sector and empowering the fintech industry.
Under these rules, BNPL activity is defined as a form of financing that allows consumers to make purchases of goods or services without an immediate cost. The objective of these regulations is to govern the licensing of BNPL companies, establishing minimum standards and procedures required for offering BNPL services. This regulatory framework is designed to foster the growth and sustainability of the sector while ensuring the protection of consumers' rights.
Key provisions within the rules cover licensing requirements, internal regulatory measures such as policies and procedures, information security standards, and measures to combat financial crimes. The regulations also include important regulatory obligations to safeguard consumers, establish credit boundaries, and outline provisions related to supervision and compliance.
Prior to the issuance of the final rules, a draft was published for public consultation, during which relevant suggestions and observations were considered and incorporated into the final version. The transparency in the regulatory process underscores SAMA's commitment to engaging stakeholders and shaping regulations that balance industry growth with consumer protection. The rules are available for review on SAMA's website, emphasizing the central bank's commitment to openness and accessibility.
