How can I access the laws, regulations, and instructions regulating the payment sector?
You can access the laws, regulations, rules, and instructions regulating the payment sector and any of their updates via SAMA's official website .
What is a payment service provider?
An entity licensed in accordance with the provisions of the Law of Payments and Payment Services and its Implementing Regulations to provide one or more of the services specifically classified as a “Payment Service" in Article 6 of the Implementing Regulations of the Law of Payments and Payment Services, as well as banks licensed in accordance with the provisions of the Banking Control Law according to the controls determined by SAMA.
What is Electronic Money?
Electronically (including magnetically) stored monetary value used as a means of payment to conduct financial transactions by digital means, (excluding virtual assets).
What are the payment services that require licensing from SAMA?
All services classified as a “Payment Service", when practiced as a business or on a regular basis, require licensing in accordance with the Law of Payments and Payment Services and its Implementing Regulations, such as services related to executing, transferring or processing money payments and payment instruments; and managing transfers and electronic cash payments through payment platforms, tools, or wallets. In addition, Article 6 of the Implementing Regulations of the Law of Payments and Payment Services defines the activities that fall within the scope of payment services.
What is the difference between a payment institution and an electronic money institution?
Licenses issued to payment service providers vary depending on the type of activities they are allowed to practice and the requirements and conditions that were met when issuing such licenses. One of the most important differences between the payment institution (PI) and the electronic money institution (EMI) is that EMIs are allowed to provide electronic money issuance services, while the PIs (whether micro or major) are not allowed to.
What is the process to obtain a license to practice a payment activity?
To learn more about the payment licensing process, please refer to the Law of Payments and Payment Services and its Implementing Regulations and the Guidelines to Apply for Payment Services Providers License, which are published on SAMA's website. To view, please click on the following (link).
Does issuing a license to practice payments activity require payment of fees?
Yes, upon acceptance of the application and prior to the issuance of the license, the applicant must pay SAMA the license issuance fee according to the type of license to be issued and as stated in Article 23 of the Law of Payments and Payment Services and its Implementing Regulations.
What are the required documents when applying for a payment activity license?
The applicant for a payment license, or their representatives, must apply to SAMA for a license. The application must include the ducoments described in Article 8 of the Implementing Regulations of the Law of Payments and Payment Services, which are published on SAMA's website. To view, please click on the following (Link).
Is the licensed payment service provider in Saudi Arabia required to follow a specific legal form?
Yes, Article 14 of the Implementing Regulations of the Law of Payments and Payment Services specifies the legal form for the entity licensed to provide payment services, depending on the type of the license. A major EMI or PI (major or micro) shall take the form of a joint stock company, while a micro PI can be a joint-stock company, a simplified joint-stock, or a limited liability company.
What are the minimum capital requirements to obtain a payment activity license?
The initial capital requirements for a payment services provider license are as follows:
A micro PI: A minimum of one million Saudi riyals (SAR 1,000,000).
A major PI: A minimum of three million Saudi riyals (SAR 3,000,000).
A micro EMI: A minimum of two million Saudi riyals (SAR 2,000,000).
A major EMI: A minimum of ten million Saudi riyals (SAR 10,000,000).
A PI providing payment initiation service independently or under a license for a payment account information service: A minimum of one million Saudi riyals (SAR 1,000,000).
A PI to provide payment account information service: A minimum of five hundred thousand Saudi riyals (SAR 500,000).
What are the requirements to obtain a micro PI license?
A PI is considered micro if the following conditions are met:
Execution of one or more relevant payment services, except issuing electronic money.
Does not provide relevant payment services cross-border to persons outside the Kingdom.
The average value of monthly payment transactions does not exceed ten million Saudi Riyals (SAR 10,000,000).
What are the requirements to obtain a major PI license?
A PI is considered major in the event that one or more relevant payment services are carried out, except for the issuance of electronic money, and the average value of monthly payments exceeds ten million Saudi riyals (10,000,000).
What are the requirements to obtain a micro EMI license?
An EMI is considered micro if the following conditions are met:
Its total average outstanding electronic money does not exceed ten million Saudi riyals (SAR 10,000,000).
The average value of monthly payment transactions does not exceed ten million Saudi Riyals (SAR 10,000,000).
Does not permit any payment service user to hold more than twenty thousand Saudi riyals (SAR 20,000) of electronic money in aggregate across all accounts held by that payment service user.
Does not permit any payment service user to execute payment transactions of more than twenty thousand Saudi Riyals (SAR 20,000) per calendar month in aggregate, including cash-out transactions (but excluding those made in the event of the closure of an electronic money account), taking into account the provisions of Article 43 of the Implementing Regulations of the Law of Payments and Payment Services
What are the requirements to obtain a major EMI license?
An EMI is considered major in the event that it exceeds any of the limits stipulated in the answer above.
What is the expected timeline to obtain a license or in-principle approval?
SAMA notifies the applicant of any deficiencies in the required documents. Upon completion of documents, SAMA confirms receiving the application in writing (Application Receipt Notice). SAMA then notifies the applicant of acceptance or rejection of their license application in writing within 90 days from the date of the Application Receipt Notice, unless extended by SAMA.
What are the cases in which SAMA rejects the license application?
SAMA may reject the license application in case an applicant does not provide the required documents and information in accordance with the requirements stipulated in Article 8 and Article 9 of the Implementing Regulations of the Law of Payments and Payment Services, or in case the Applicant does not provide such documents and information to SAMA within the specified period.
When can a previously rejected license applicant request reconsideration of the application?
The applicant may submit a request to reconsider the rejected application within 12 months from the date of rejection or any shorter period determined by SAMA.
What is the specified period for completing the company incorporation process after obtaining the in-principle approval?
The applicant must complete the incorporation process within 180 days of receiving SAMA's in-principle approval and provide SAMA with a copy of the company's commercial register articles of incorporation or articles of association (as applicable) that reflect the licensed activities in the in-principle approval.
19. Is the applicant allowed to provide payment services or activities if they obtained in-principle approval from SAMA?
The in-principle approval is not a permit to practice the activity, and a license must be obtained before practicing the activity.
What is the validity duration of a payment service license?
SAMA determines the validity duration of the license for a payment services provider at a maximum of five years.
What is the specified license renewal window?
License renewal applications must be submitted to SAMA at least six months prior to the expiry of the original license period or the renewed period in accordance with the form set by SAMA.
What are safeguarded funds?
Funds that are safeguarded according to the following cases:
For PIs, funds received from, or for the benefit of, a payment service user as a result of the execution of a payment transaction; or funds received from another payment service provider for the execution of a payment transaction on behalf of a payment service user.
For EMIs (and electronic money distributors), funds received in exchange for electronic money that has been or is to be issued and does not include deposits held at banks.
Is it necessary to obtain SAMA's approval upon launching a new product/service or modifying an existing product/service?
Yes, a written non-objection letter from SAMA must be obtained before making any changes in accordance with Article 39 of the Implementing Regulations of the Law of Payments and Payment Services.
Can a licensed payment service company practice any other activity?
The licensee must obtain SAMA's non-objection before engaging or participating in establishing any entity or commercial or investment business; or commencing the practice of any activity.
