Saudi Central Bank Issues Rules for Regulating (BNPL) Companies
The Saudi Central Bank “SAMA” announced the issuance of rules for regulating Buy Now, Pay Later (BNPL) companies, according to Saudi Press Agency.
This step comes as part of its supervisory and regulatory role over BNPL companies, and its ongoing efforts to develop the financing sector in general, and to enable the financial technology sector in particular.
Definition of BNPL Activity
The rules of Saudi Central Bank include a definition of the BNPL activity as financing customers to purchase goods or services from stores without any immediate cost due from the customer.
Objectives of BNPL Regulation
The primary purpose of the BNPL regulation, as issued by the Saudi Central Bank, is firstly to organize the licensing provisions for this type of companies.
Secondly, it aims to set the minimum standards and procedures necessary for the practice of this activity, thereby contributing to its growth and sustainability.
Furthermore, it focuses on not overlooking the principles and rules of protecting the rights of financial institutions’ customers. Finally, these regulations ensure a balanced approach between industry growth and customer protection.
Provisions, Obligations
The rules include several key provisions and obligations. These encompass licensing requirements, internal regulatory policies, and procedures. They also cover information security and measures against financial crimes. Additionally, the rules focus on customer protection, activity and credit limits, and supervision and compliance guidelines.
Initial Project, Public Input
The Saudi Central Bank had previously introduced a draft of the BNPL regulatory rules for public and expert opinion as part of its commitment to transparency and participation.
The comments and views were studied and taken into consideration in the final version of these rules.
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