THE LAW FIRM OF HAZIM AL MADANI ATTORNEYS AND LEGAL CONSULTANTS

Buy Now, Pay Later Companies in the Kingdom and Their Regulatory Rules

In recent years, the Kingdom has seen significant developments in the field of digital financial services, especially in the field of buy now, pay later (BNPL), which allows consumers to purchase goods and services online and pay for them later under favorable terms. This type of payment has become popular among young people and online shoppers, as it provides them with flexibility and ease in shopping.
A BNPL company is a joint stock company licensed by the Saudi Central Bank, and its primary role is to carry out the BNPL activity, which is based on financing the customer to purchase goods or services from stores without any due cost to the customer.
With the increasing prevalence of these services, several risks and challenges related to protecting consumer rights and ensuring the safety and stability of the financial system have emerged. For this reason, the Capital Market Authority in the Kingdom issued new regulatory rules for BNPL companies, aimed at defining standards and conditions for practicing this activity, improving the quality and transparency of services provided, and ensuring BNPL companies comply with preventive procedures against money laundering and terrorist financing.

The most important and prominent of these rules issued by the Capital Market Authority include:

This step confirms that the Capital Market Authority is keen to support digital transformation in the finance sector and encourage competitiveness and innovation in this field while considering consumer interests and community safety. The Authority hopes that these rules will help raise consumer confidence in BNPL companies and enhance their role in achieving financial inclusion and developing the national economy.
In addition, we want to mention the regulatory rules for BNPL companies in the Kingdom:
In conclusion, we want to point out that the regulation of BNPL companies plays a role in enhancing the local economy and stimulating commercial activity by facilitating access to goods and services and encouraging consumption. These companies can contribute to increasing commercial revenues and enhancing economic growth. Every individual and every company in the BNPL market in the Kingdom must comply with the applicable rules and regulations. Compliance with legal requirements is necessary to ensure a fair competitive process and protect consumer rights.
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