SAMA issues rules regulating BNPL companies

The Saudi Central Bank (SAMA) issued rules regulating buy-now, pay-later (BNPL) companies as part of its role in supervising and controlling these firms. 

These rules define BNPL activity as a type of financing that allows a consumer to purchase goods or services without a term cost payable by the consumer. 

SAMA stressed that the decision reflects its “continuous efforts to develop the financial sector as a whole and empower the fintech sector in particular." 

The rules aim to regulate the licensing of the BNPL companies and set the minimum standards and procedures required to practice the postpaid activity, in a way that contributes to its growth and sustainability, without neglecting the principles and rules of protecting customers of financial institutions and their rights.

They stipulate a bundle of provisions and obligations, the most important of which are: obtaining a license, internal organization such as policies and procedures, information security requirements and combating financial crimes.

There are also regulatory obligations aimed at protecting the customer, setting activity limits, credit limits, and supervision and compliance provisions.

SAMA had previously published draft rules for regulating BNPL companies for public consultation, in order to enhance the principle of transparency and participation, indicating that the comments and views were considered in the final version.

Source : Argaam