- Saudi Arabia’s Central Bank (SAMA) has introduced new rules for Buy Now, Pay Later (BNPL) setups, aiming to bring order to the rapidly growing financial sector.
- The guidelines require BNPL companies to have a local base with at least SAR 5 million in capital and encourage hiring local talent.
- The rules also cover technology standards, anti-money laundering practices, data privacy, and customer protection.
Saudi Arabia’s Central Bank, SAMA, recently rolled out new rules for Buy Now, Pay Later (BNPL) setups in the country. These rules are pretty detailed and are meant to bring some order into this rapidly growing financial sector.
The gist of these guidelines is that BNPL companies in Saudi Arabia need to have a local base with at least SAR 5 million in capital. Also, they’re really pushing for the hiring of local talent initially, at least half of the workforce should be Saudi nationals, gradually increasing to 75% over time. They’re keeping a tight watch on hiring non-Saudis, allowing it only for roles where there’s specific expertise not available in the local job market.
These rules also cover a bunch of other areas like technology standards, anti-money laundering practices, data privacy, and making sure customers are protected.
They’ve put limits on BNPL deals too like capping the credit at 5,000 SAR and keeping the repayment period under a year. And they’re saying a clear no to collecting cash as part of these transactions.
This whole revamp of regulations comes as BNPL platforms are booming worldwide, and the Middle East is no exception. Over in the UAE, their Central Bank made similar moves to regulate short-term credit deals. It seems like both regions are really pushing to make finance more inclusive, innovative, and stable. In the UAE, they’ve even come up with new ways for companies to work under licensed banks or finance firms, subject to Central Bank approval. They’ve created this option for companies to operate as Restricted License Finance Companies, which they can get directly from the Central Bank.
If any company isn’t licensed and is dealing with short-term credit stuff, they’ve got two options: either apply for a Restricted License Finance Company permit or team up with licensed finance companies or banks to stay on the right side of the rules.
These guidelines are aiming to keep everyone customers and businesses safe while also giving space for growth and innovation in finance. Ultimately, the goal is to keep the financial sector stable and trustworthy.