Upgrading Point-of-Sale Devices Operating in the Kingdom to 4G Technology

In the Name of Allah, the Most Gracious, the Most Merciful Saudi Arabian Monetary Authority (SAMA) Saudi Payments

Banking Policy Department
Ref. No.: 41061590
Attachments: None
Date: 1441/11/01 (AH)
Attachments: None

Respected Parties,
Gentlemen,
Peace, mercy, and blessings of Allah be upon you.

Subject: Upgrading Point-of-Sale Devices Operating in the Kingdom to 4G Technology.

Based on the powers vested in the Authority by its system issued under Royal Decree No. (23) dated 1377/5/23 AH, the Banking Control System issued under Royal Decree No. (5/M) dated 1386/2/22 AH, and the Council of Ministers Resolution No. (266) dated 144/5/2 AH, which confirms that the Saudi Arabian Monetary Authority is the competent authority by law to operate, monitor, supervise, and issue rules, regulations, and licenses for payment systems and financial settlement services in the Kingdom according to the standards applied by the Authority in this regard. In reference to the Communications, Space and Technology Commission's decision to update the standard technical specifications for terminal devices connected to mobile networks, mandating that these devices support 4G networks as a minimum, considering their approval and clearance by the General Authority for Customs, and the trend of telecommunications service providers in the Kingdom to decommission 2G and 3G networks and replace them with more advanced 4G and 5G networks. Given that this decision will directly affect POS devices operating in the Kingdom.

We inform you that, in coordination with the Communications, Space and Technology Commission, it has been decided to begin decommissioning the 3G network by the end of 2023, and decommissioning the 2G network during the fourth quarter of 2024. Accordingly, the Authority and Saudi Payments have worked to submit a work plan to replace POS devices operating in the Saudi market with modern devices that comply with the aforementioned Communications, Space and Technology Commission decisions, as follows:

1. All POS device suppliers are required to provide devices supporting the 4G network starting from June of this year until the end of the current year 2020, and submit them to the Clearing Center at Saudi Payments for technical rectification and verification of their compatibility with the payment network (Mada).
2. Installing POS devices supporting the 4G network as a minimum for new installation requests starting from January 2021, which includes devices replaced due to technical faults.

We further inform you that banks, financial institutions, and electronic payment service hosting companies (Acquiring Entities) must implement the aforementioned replacement plan starting from January 2021 for all currently operating POS devices in the Kingdom, at a rate of no less than 4% monthly of the total number of POS devices per entity. The replacement plan, completion rates, and remaining numbers shall be shared with the Authority and Saudi Payments monthly starting from the end of January 2021 via the following electronic addresses: (amalturki@saudipayments.com) and (walnajidi@sama.gov.sa).

For your information, response, and action accordingly.
Yours sincerely,

Fahd bin Ibrahim Al-Shathri
Deputy Governor for Supervision

Distribution Scope:

• Banks and financial institutions operating in the Kingdom.
• Payment service providers operating in the Kingdom.
• Saudi Payments.

P.O. Box 2992, Riyadh 11169, Telegram: MARKAZI, Telex: 404400, Phone: 4632000, Fax: 4667414