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The Saudi Arabian Monetary Authority (SAMA) has released regulations governing buy now, pay later (BNPL) firms.

Saudi Arabia’s financial technology sector is poised for expansion as the Saudi Central Bank, also known as SAMA, has introduced regulations governing buy now, pay later (BNPL) companies. These guidelines, issued on Dec. 17, are aimed at overseeing the licensing process and establishing minimum standards for BNPL firms. SAMA emphasized that these regulations will support the sector’s growth and sustainability while ensuring the protection of users’ rights.

The guidelines define BNPL activity as a form of financing that allows consumers to purchase goods or services without immediate payment. They include provisions related to licensing prerequisites, the regulation of internal policies and procedures, information security standards, and measures to combat financial crimes. SAMA specified that BNPL companies must have a minimum capital of SR5 million ($1.3 million), with the flexibility to adjust this figure as needed.

Additionally, the regulations mandate that at least half of the human resources employed by BNPL companies must be Saudi nationals at the outset of operations, with this requirement applicable across all departments and organizational levels. The guidelines also outline regulatory requirements aimed at safeguarding consumers, establishing credit boundaries, and ensuring compliance with supervision and compliance standards.

SAMA stated its commitment to enforcing compliance with relevant laws, regulations, rules, and instructions, including conducting inspection visits to BNPL companies’ headquarters, meeting with staff, and reviewing their systems, procedures, and records.

These regulations come amidst a rising number of companies offering pay-later services in Saudi Arabia. Recently, Jeel Pay, a Saudi fintech startup, obtained approval from SAMA, bringing the total number of authorized BNPL companies in the Kingdom to seven. This development underscores SAMA’s ongoing efforts to support post-paid companies and reflects its broader commitment to advancing the objectives of Vision 2030. As outlined in the National Fintech Strategy, Saudi Arabia aims to have 525 such companies, creating 18,000 jobs and generating SR13.3 billion in direct gross domestic product contributions. To achieve these goals, SAMA is dedicated to fostering innovation, promoting financial inclusion, and enhancing accessibility within the region.

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