New Saudi payment services rules will bolster international investment

Payment services in Saudi Arabia are specifically regulated under the Law of Payments and Payment Services, which came into effect in February 2022. Now, new implementing regulations have been issued to codify the use of payment products and services in the Kingdom.

Barkha Doshi of Pinsent Masons said: “With the significant growth in the financial sector in 2023, the Implementing Regulations come at an exciting time for Saudi Arabia. Further clarity on the regulatory environment will likely mean more businesses will set up establishments in Saudi Arabia. The implementing regulations enhance Saudi Arabia’s efforts to bring itself up to international standards in all sectors of the economy.”

“In the context of Saudi Vision 2030, the government’s plan to diversify the national economy, these new implementing regulations will create a striking environment for investment, stimulate innovation and competition, and boost introduction of payment products and services that follow the newest international trends and meet clients’ needs,” she added.

The regulations establish the regulatory framework and requirements for operators and providers of payment services in the Kingdom, particularly in defining procedures and licensing, supervision, and related oversight requirements. They also create the necessary mechanisms for managing the risks of payment systems and payment services that may affect the payment and settlement sector and financial stability.

The implementing regulations list 12 payment service activities that are regulated by SAMA. ‘Aggregated payment services’ and ‘payment account services’ are two new activities that were not previously regulated. At the same time, ‘money remittance’ has been removed as a licensed payment service activity. It is instead listed as a ‘related payment service’.

Doshi said: “Saudi businesses will have to be aware of the new licensing provisions and must ensure that they apply for a license if they are conducting any of the regulated activities. Once a license is issued, general information about the licensee shall be listed on the public register by SAMA.”