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Buy Now, Pay Later (BNPL) companies have swiftly reshaped consumer spending habits worldwide, offering a convenient alternative to traditional credit options. 

These companies’ ascent marks a significant shift in the way people approach spending and affordability, capturing the attention of both consumers and financial institutions alike.

Now, for the booming BNPL industry, the Saudi Central Bank (SAMA) has unveiled a set of comprehensive regulations to establish a level playing field while safeguarding consumer rights and promoting the sector’s sustainable growth.

The new framework defines BNPL as any financing allowing purchases without immediate payment, marking a clear line in the sand for the industry. Under SAMA’s watch, these companies must now navigate stricter licensing requirements, internal policy standards, and information security measures.

Under the updated regulations, aspiring BNPL companies must maintain a minimum capital of around $1.3 million. Furthermore, SAMA mandates that at least half of a BNPL company’s workforce must be Saudi nationals, promoting local employment and knowledge transfer within the sector.

The bank also introduced regulatory demands to protect consumers and define credit activity limits alongside supervision and adherence rules. The institution emphasized its commitment to enforcing compliance with applicable laws, regulations, rules, and directives by conducting inspection visits to the company’s headquarters.

SAMA’s decision brings the total authorized BNPL companies in the kingdom to seven, adding to the 58 licensed financing firms, demonstrating SAMA’s ongoing support for post-paid businesses.

Aligned with the National Fintech Strategy under Vision 2030, the kingdom aspires to host 525 such enterprises, fostering 18,000 jobs and yielding approximately $3.5 billion in direct GDP contributions.