Saudi Central Bank Issues Permit to “Jeel Pay” to Offer BNPL Solutions

Boosting the ‘Buy Now Pay Later’ (BNPL) market in Saudi Arabia, the Saudi Central Bank (SAMA) on Monday issued licence to “Jeel Pay” company to provide BNPL solutions to its customers across the Kingdom.

With Jeel Pay, there are now seven authorized companies offering BNPL solutions in Saudi Arabia, bringing the total number of licensed/permitted finance companies to 58. Some of the popular firms offering similar solutions include Tamara, Tabby, Telr, Spotti and Postpay.

This decision reflects SAMA’s endeavour to support the finance and FinTech sectors by enhancing operational efficiency and innovative financial solutions to promote financial inclusion in Saudi Arabia.

According to Amer Rajkhan, CEO of the company, digital transformation in the Middle East, particularly in Saudi Arabia, is marked by a collective commitment to change. Unlike some regions where digital adoption is driven by individual organisations, the Middle East as a whole, across all sectors, is wholeheartedly embracing digital transformation.

“The key factors contributing to this momentum include the youth demographic and proactive government initiatives that facilitate a smoother transition. The region’s focus on customer-centricity is also notable, with a keen emphasis on understanding customer needs and addressing their challenges through digital solutions,” he explained.

Additionally, the Middle East enjoys the advantage of having a relatively low burden of legacy systems, allowing for a rapid transition to modern technology platforms, thereby fostering innovation and scalability.

Saudi’s BNPL Market

BNPL payments in the Saudi Arabia are expected to grow by 21.7% on an annual basis to reach $1.4 billion in 2023 and to $2.7 billion in 2027, according to Markets and Research firm, which is the largest market research store globally.

However, in its report, market intelligence and advisory firm Mordor Intelligence said that the BNPL Gross Merchandise Value in the Saudi Arabia will increase from $1.2 billion in 2022 to reach $2.7 billion by 2028.

The Kingdom aims to have as many as 525 such companies which is expected to create 18,000 jobs and generate $3.5 billion in in direct gross domestic product contributions as per the “Vision 2030” goals outlined in the National Fintech Strategy,

To achieve these objectives, SAMA is focused on fostering innovation within the financial sector and enhancing inclusion and accessibility across the Kingdom. 

In October, Saudi fintech startup KadiPay obtained a permit from SAMA to provide BNPL solutions. In July this year, the Saudi Central Bank granted similar permits to the BNPL platforms known as Tabby and Tamara in its efforts to affirm its commitment to supporting the fintech sector. The licence for Tamara is to pursue post-paid payment activity.

Likewise, MIS Forward received permission from the Saudi Central Bank in March to implement a BNPL solution, allowing customers to purchase from merchants without paying term-financing fees.

Fintech Gets Boost

According to a report, SAMA’s permit is more than just a regulatory green light. It is a stamp of approval for Jeel Pay’s business model and operational standards. This recognition by Saudi Arabia’s financial regulator not only legitimises Jeel Pay’s operations but also places it at the forefront of the Kingdom’s fintech innovation.

Moreover, Jeel Pay’s entrance into the regulated financial space is set to catalyse significant changes in Saudi’s fintech ecosystem. By offering flexible payment solutions, Jeel Pay is meets the growing demand for consumer-friendly financial services. This as a result, contributes to the digital transformation of the Saudi economy.