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  • Chapter 3: Licensing Requirements for Payment Service Providers

    • Article 42

       (1) 

      A Payment Service Provider is considered a Micro PI if the following conditions are met:
       

      (a)Carries on one or more Relevant Payment Services, except issuing Electronic Money;
       
      (b)Does not provide Relevant Payment Services cross-border to Persons outside the Kingdom;
       
      (c)Does not exceed the Average Monthly Payment Transaction Value of ten million SAR.
       
       (2)A Payment Service Provider is considered a Major PI in the event that one or more Relevant Payment Services are implemented, except for the issuance of Electronic Money, and the average value of monthly payments exceeds ten million SAR.
       

    • Article 43

       (1)

      An EMI is considered a Micro EMI if the following conditions are met:
       

      (a)Ensures that its Total Average Outstanding Electronic Money does not exceed ten million SAR;
       
      (b)Does not exceed an Average Monthly Payment Transaction Value of ten million SAR;
       
      (c)Does not permit any Payment Service User to hold more than twenty thousand SAR of Electronic Money in aggregate across all accounts held by that Payment Service User, subject to Paragraph (3) of this Article;
       
      (d)Does not permit any Payment Service User to execute Payment Transactions of more than twenty thousand SAR per calendar month in aggregate, including Cash-Out Transactions (but excluding those made in the event of the closure of an Electronic Money account), subject to Paragraph (3) of this Article.
       
       (2) An EMI is considered a Major EMI in the event that it exceeds any of the limits stipulated in the above Paragraph of this Article.
       
       (3)

      A Micro EMI must comply, in the cases prescribed below, with the following:
       

      (a) A Micro EMI that has yet to start issuing Electronic Money, or has been issuing Electronic Money for fewer than twelve calendar months, must ensure that its projected Total Average Outstanding Electronic Money for its initial twelve-month period of operations does not exceed ten million SAR; and
       
      (b) A Micro EMI that has yet to commence the provision of Relevant Payment Services, or has been providing Relevant Payment Services for fewer than twelve calendar months, must ensure that its projected Average Monthly Payment Transaction Value does not exceed ten million SAR.
       
       (4) SAMA may increase one or more of the limits set out in Paragraph (1) of this Article if the Micro EMI submits an application that includes adequate causes and is committed to having sufficient systems and controls to monitor those limits, taking into account the power of SAMA to restrict its approval until additional conditions as deems appropriate are met.
       
       (5) 

      A Major EMI must comply with the following:

      (a) Not permit any Payment Service User to hold Electronic Money of more than one hundred thousand SAR in aggregate across all accounts held by that Payment Service User; and
       
      (b) Not permit any Payment Service User to execute Payment Transactions of more than one hundred thousand SAR (per calendar month in aggregate, including Cash-Out Transactions (but excluding those made in the event of the closure of an Electronic Money account).
       
       (6)SAMA may increase one or more of the limits set out in Paragraph (5) of this Article if the Major EMI submits an application that includes adequate causes and is committed to having sufficient systems and controls to monitor those limits, taking into account the power of SAMA to restrict its approval until additional conditions as deems appropriate are met.
       

    • Article 44

       (1)

      An Applicant must provide evidence satisfactory to SAMA that it meets the initial capital requirement for licensing as follows:
       

      (a)Provide evidence of possession of at least one million SAR in paid-up equity for a Micro PI License.
       
      (b) Provide evidence of possession of at least three million SAR in paid-up equity for a Major PI License.
       
      (c) Provide evidence of possession of at least two million SAR in paid-up equity for a Micro EMI License.
       
      (d) Provide evidence of possession of at least ten million SAR in paid-up equity for a Major EMI License.
       
      (e) Provide evidence of possession of at least one million SAR in paid-up equity for a Payment Initiation Service License independently or with a Payment Account Information Services License.
       
      (f) Provide evidence of possession of at least five hundred thousand SAR in paid-up equity for a Payment Account Information Services License.
       
       (2) An Applicant for a License to act as a Payment System Operator must comply with such initial capital requirements as determined by SAMA that are commensurate with the projected size, as well as the nature, scale and complexity of the proposed Payment System or Systems proposed to be operated by it.
       

    • Article 45

       (1)As an on-going capital requirement, Licensees must maintain regulatory capital as set out in this Article.
       
       (2)A Micro PI and Micro EMI must maintain an amount equal to the initial capital requirement stated in Article 44 of the Implementing Regulations.
       
       (3) 

      A Major PI must maintain an amount equal to the higher of:
       

      (a) The initial capital requirement stated in Article 44 of the Implementing Regulations.
       
      (b) 1% of the Major PI’s Average Monthly Payment Transaction Value.
       
       (4)

      A Major EMI must maintain an amount equal to the higher of:
       

      (a)The initial capital requirement stated in Article 44 of the Implementing Regulations.
       
      (b) 2% of the Total Average Outstanding Electronic Money.
       
       (5) 

      A Payment Service Provider must provide evidence of its compliance with its on-going capital requirements by providing the following:
       

      (a)A certified copy of a license issued by the competent licensing authority in the Kingdom showing its paid-up capital;
       
      (b)Audited financial statements by a certified public accountant in the Kingdom;
       
      (c)Any other method deemed acceptable by SAMA.
       
       (6)A Payment Service Provider must comply with the relevant accounting standards applicable in the Kingdom, as determined by SAMA in this regard.
       

    • Article 46

       

       (1)Payment Account Information Services Provider or Payment Initiation Services Provider must hold professional indemnity insurance or a comparable guarantee.
       
       (2) 

      The professional indemnity insurance must cover potential liability to Payment Account Service Providers and Payment Service Users, resulting from - unless there is a specific value indicated by SAMA :
       

      (a) In respect of its Payment Account Information Services, unauthorized or fraudulent access to, or use of, Payment Account information;
       
      (b)In respect of its Payment Initiation Services, Unauthorized Payment Transactions and non-execution or defective or late execution of transactions and associated liability for charges and interest and right of recourse.