The Saudi Arabian Monetary Authority (SAMA) has officially announced the issuance of regulations governing Buy Now, Pay Later (BNPL) companies.
This regulatory move is in line with SAMA’s supervisory and oversight role over BNPL firms, showcasing its ongoing efforts to develop the financial sector and empower the financial technology (fintech) industry specifically.
The newly established rules provide a definition of BNPL activities as financing customers to make purchases of goods or services from merchants without incurring immediate costs to the customer.
The primary objective of these regulations is to standardize licensing provisions for BNPL companies and establish minimum standards and necessary procedures for conducting their activities.
This framework aims to contribute to the growth and sustainability of the BNPL sector while ensuring the protection of financial institution customers and their rights.
Key provisions and obligations outlined in the regulations include licensing requirements, internal regulations such as policies and internal procedures, information security requirements, and measures to combat financial crimes.
Additionally, regulatory commitments are in place to protect customers, define the scope of activities and credit limits, as well as provisions for supervision and compliance.
Earlier, the Saudi Central Bank had introduced a draft of the BNPL regulations for public and expert review, seeking feedback and insights to enhance transparency and public engagement. After a thorough evaluation of comments and observations received, the final version of the regulations has been formulated.
Interested parties can access the regulations on the official website through this [link](insert link). These regulations underscore SAMA’s commitment to fostering a robust financial environment and maintaining a balance between innovation in the fintech sector and consumer protection.
