The Saudi Central Bank (SAMA) has granted Spotii and Madfu permits to provide Buy Now Pay Later (BNPL) services to customers wishing to purchase products or services from merchants without incurring term financing cost.
SAMA said the initiative is aimed at enticing a new segment of investors and companies that can bring added value to the sector for more efficient operation, while maintaining full adherence its regulatory and supervisory guidelines.
Dubai-based fintech Spotii launched its shop now pay later platform in the United Arab Emirates, in 2020 beforre it was acquired by Australia-based Zip in 2021. The startup partners with online merchants, allowing them to offer 4 cost-free installments to the customers on their purchases, helping to increase the sales and drive conversion of the business and reduce refunds.
Madfu is a Riyadh-based startup that allows users of its app to split purchases in designated stores into 3 interest-free payments, as well as earning cashback. It raised $1.3m in a pre-seed funding round in November 2022.
In February, the Saudi Central Bank announced the licensing of two finance companies, Forus and Tameed that specialise in debt-based crowdfunding. The licences were granted to the companies after successful testing of their solutions in SAMA’s Regulatory Sandbox; an experimental environment dedicated to innovative financial products and services in Saudi Arabia.