Regulatory Alerts2020-08-17
Readiness to Receive Requests for Installing Electronic Payment Methods for All Retail Sector Activities
Issued by the Saudi Central Bank’s Banking Policies Department, this circular mandates all banks and payment service providers to be fully prepared to receive requests for installing authorized electronic payment methods, including Mada point-of-sale terminals and digital wallets, across all retail sector activities. Effective from 25 August 2020, the directive requires financial institutions to promptly open merchant accounts and digital wallets while strictly applying accurate Merchant Category Codes (MCC) in compliance with established regulatory and operational rules. The Bank further instructs institutions to coordinate internally with branches and customer service departments to ensure staff accurately handle public inquiries, thereby supporting the national objective of achieving a 70% electronic payment ratio by 2030.
In the Name of Allah, the Most Gracious, the Most Merciful
Saudi Central Bank (SAMA)
Reference: Main
Banking Policies Department
Ref. No.: 41071602
Date: 1441/12/28 (AH)
Attachments: None
General Circular
To: The Board Members / Dear Sirs,
Peace be upon you, and the mercy of Allah and His blessings.
Subject: Readiness of Banks and Payment Service Providers to Receive Requests for Installing Electronic Payment Methods for All Retail Sector Activities.
In line with the Saudi Central Bank’s Payments Systems Strategy and Financial Sector Development Program objectives to enhance electronic payments, reduce cash transactions, and achieve a 70% electronic payment ratio by 2030, and in continuation of the Bank’s efforts to activate digital wallets through implementing the Integrated Digital Payments Strategy Program to elevate electronic service levels, as well as the National Program for Combating Commercial Cover-up's efforts to gradually mandate retail sector activities to provide electronic payment methods.
The Program, in cooperation with the Bank, the Ministry of Municipal and Rural Affairs, and the Ministry of Commerce, has mandated all retail sector activities in the Kingdom (previously unmandated) to provide electronic payment methods starting from 1/6/1442 AH (corresponding to 25/8/2020 AD). To ensure the success of efforts to activate this decision and guarantee full readiness to cope with the expected volume of requests, all banks, commercial banks, and payment service providers must comply with the following:
- Readiness to respond to all requests for opening accounts and digital wallets for merchants operating in all retail sector activities.
- Readiness to respond to all requests for installing electronic payment methods authorized by the Bank, including (Mada point-of-sale terminals and digital wallets) through various communication channels such as the official website, unified number, etc., and compliance with all regulatory and operational rules for these services.
Compliance - upon providing a payment method - with the accurate use of Merchant Category Codes (MCC).
Internal coordination with branches, customer service, and related departments, informing them of the decision and its follow-ups, and ensuring their understanding when receiving public inquiries.
Yours sincerely,
Fahd bin Ibrahim Al-Shamri
Deputy Governor for Supervision
Distribution Scope:
- Banks and commercial banks operating in the Kingdom.
- Payment service providers.
- Saudi Payments Company.
P.O. Box 2997, Riyadh 11179, Postal Address: Central, Telefax 404400, Phone 6732000, Fax 6712414