Saudi Arabia Introduces New Rules to Regulate Buy Now, Pay Later Sector

Saudi Arabia Introduces New Rules to Regulate Buy Now, Pay Later Sector

Saudi Arabia, the Arab world’s largest economy, has announced new rules to regulate the licensing of buy now, pay later (BNPL) platforms. The rules include provisions related to licensing requirements, regulatory measures, information security standards, and measures to combat financial crimes, according to the Saudi Central Bank. The regulations aim to support the growth and sustainability of the sector while safeguarding consumers’ rights. The BNPL market has experienced significant growth since the Covid-19 pandemic, driven by millennials and Generation Z. The global BNPL market is projected to reach $565.8 billion in 2026, with the Saudi Arabian market expected to grow to $1.83 billion by 2028. With the rise of the BNPL services market, regulators worldwide are introducing tougher guidelines to protect consumers from excessive debt.

Last month, Mubadala-backed BNPL platform Tabby achieved unicorn status after raising $200 million in funding. The investment is expected to help Tabby expand its operations in Saudi Arabia and the UAE.

In 2022, the US Consumer Financial Protection Bureau announced plans to regulate BNPL companies, and the UK introduced draft legislation to regulate the sector earlier this year.