The updates are part of SAMA’s efforts to promote an innovation-based financial technology ecosystem in the KSA.
Last month, the Saudi Arabian Monetary Authority (SAMA) issued an update to the recently implemented Payment Services Provider Regulations (PSPR), which was introduced in January 2020 to regulate Payment Services Providers (PSPs) operating in the Kingdom of Saudi Arabia (KSA). The PSPR provides a clear path for PSPs to obtain SAMA-issued licenses to provide payment services in the KSA. Notably, the PSPR applies concepts implemented by the European Union’s Payment Services Directive (PSD2). This should remove some of the friction involved in international PSPs launching operations in the KSA by allowing them to apply the same business models and operating processes already applied in the jurisdictions in which they operate.
Key points arising from the August update:
- Resubmission of a refused PSPR license application will only be accepted nine months after SAMA’s refusal of the original submission.
- PSPs must now respond to customer complaints with a decision within five business days. PSPs are now responsible for outsourced third parties’ delay or failure of fair implementation of the payment transaction, exposing PSPs to additional liabilities.
- PSPs are now obligated to (i) submit quarterly financial reports within a month after each quarter, and (ii) submit audited financials annually within two months after each fiscal year.
This Client Alert summarizes these updates and provides an overview of regulated activities, licenses, and application requirements under the PSPR.