Based on the powers assigned to the Central Bank under its regulations issued by Royal Decree No. (23) dated 23/05/1377 AH, and the Banking Control Law issued by Royal Decree No. (M/5) dated 22/02/1386 AH, as well as Cabinet Resolution No. (226) dated 05/02/1440 AH, which confirms that the Central Bank is the legally designated authority responsible for operating payment systems and financial settlement services in the Kingdom, monitoring and supervising them, and has the authority to issue rules, regulations, and licenses according to the standards applied by the Central Bank in this regard. In reference to the decision by the Communications and Information Technology Commission to update the technical specifications for terminal devices connected to mobile networks, mandating that these devices support at least 4G networks to be approved and allowed for clearance by the General Authority for Customs, and the shift by telecommunications service providers in the Kingdom are moving to discontinue 2G and 3G networks, replacing them with the more advanced 4G and 5G networks, it is noted that this decision will have a direct impact on point-of-sale devices operating in the Kingdom.

I would like to inform you that, in coordination with the Communications and Information Technology Commission, it has been decided to begin the shutdown of the 3G network by the end of 2022 and to discontinue the 2G network during the fourth quarter of 2024. Accordingly, the Central Bank and the Saudi Payments Company have developed an action plan to replace the current point-of-sale devices in the Saudi market with modern devices that comply with the aforementioned decisions of the Communications and Information Technology Commission, as follows:

1. All point-of-sale device suppliers are required to provide devices that support the 4G network starting from June 2020 until the end of this year. These devices must be submitted to the Saudi Payments Company’s authorization center for technical approval and to ensure compatibility with the payment network (Mada).

2. Approval of the installation of point-of-sale devices that support the 4G network as a minimum requirement for new installations requests starting from January 2021. This also includes devices being replaced due to technical malfunctions.

I would also like to inform you that banks, financial institutions, and companies hosting electronic payment services must implement the aforementioned replacement plan starting from January 2021 for all currently operating point-of-sale devices in the Kingdom. This entails replacing at least 44 devices monthly from the total number of point-of-sale devices for each entity. The replacement plan, along with progress percentages and remaining quantities, should be shared with the Central Bank and the Saudi Payments Company on a monthly basis starting from the end of January 2021.