Your customer may reach the checkout page convinced by the product, only to pause when faced with paying the full amount all at once. At this moment, Buy Now, Pay Later (BNPL) can offer them the flexibility needed to complete the purchase, while introducing other considerations for you as a merchant: service transaction fees, settlement payout schedules, and how to manage returns.

Because the choice of payment method affects both customer experience and store profitability, you need to understand what lies behind the phrase "Buy Now, Pay Later." In this guide, we explore the concept of BNPL and its regulatory framework in Saudi Arabia, the providers available on Salla, and how to select the right service and activate it seamlessly in your store from the outset.

What is Buy Now, Pay Later (BNPL)?

Buy Now, Pay Later (BNPL) is a financing service that allows customers to purchase a product or service and pay for it at a later date or across agreed-upon instalments. In Saudi Arabia, BNPL activities are regulated by the Saudi Central Bank (SAMA), with provider terms and available plans dictating repayment schedules and costs.

For the merchant, the importance of this service begins at a familiar juncture: a customer has selected a product and understands its value, yet hesitates to pay the full amount upfront. Providing an instalment option can help them complete a purchase suited to their budget, but it introduces business questions worth answering: How much will the transaction cost you? When will your funds be settled? And how do you handle order cancellations or returns?

Understanding these details helps you choose a payment method that serves the customer while protecting your store's margins, rather than simply adopting it because other stores do.

How Does BNPL Work for the Customer and the Merchant?

For the Customer

The customer selects BNPL from the available payment options at checkout, then proceeds through the provider’s verification process to confirm identity and eligibility. Upon approval, the available plan is presented—detailing any down payment, repayment dates, and disclosed fees—for the customer to accept before completing the purchase.

Selecting the service does not guarantee approval for every order; approval depends on the provider’s assessment, the customer’s creditworthiness, their available credit limit, and transaction criteria. Likewise, two customers purchasing the same product will not necessarily receive the same instalment plan.

For the Merchant

The store contracts with the service provider and completes the onboarding and integration requirements. Following a successful transaction, the store processes the order according to the verified payment status and receives settlements in line with the payout schedule, commission rates, and terms outlined in its agreement.

Here, it is crucial to distinguish between customer instalments and merchant settlement payouts: the customer's payment schedule does not dictate when funds reach your store account. Review your contract for transfer timelines, deductions, party obligations, and dispute and refund procedures before factoring the service’s impact into your cash flow.

To explore other payment options you can offer alongside BNPL, see the guide on Saudi Payment Gateways and How to Activate Them on Salla.

What are SAMA's Regulations for BNPL?

The Regulatory Rules for Buy Now, Pay Later (BNPL) Companies define the operating framework for this activity in the Kingdom. Here are the key points merchants and customers need to understand, taking into account subsequent regulatory amendments.

Provider Licensing Differs from Store Activation

Conducting BNPL financing activities requires a licence from the Saudi Central Bank. A store offering the service through a licensed provider simply fulfils onboarding, acceptance, and technical integration requirements; activating the payment method does not classify the store as a financing entity. SAMA Rulebook

Do Not Pass Your Merchant Fees to the Customer

Regulations require BNPL companies to ensure that contracted merchants do not pass on or impose additional surcharges on the customer. Therefore, you must not add extra fees to offset the provider's commission when a customer chooses BNPL. SAMA Rulebook

Customer-facing provider fees should be reviewed within the plan terms: the rules outline exceptions for late payment fees and collection charges in accordance with regulatory controls, as well as a subsequent decision regarding administrative fees not exceeding 1% of the financing amount or SAR 50, whichever is lower. The existence of a regulatory allowance does not mean every provider applies these fees. SAMA Rulebook

The Regulatory Limit is Not a Guaranteed Limit for Every Purchase

SAMA raised the maximum aggregate outstanding financing cap per individual customer to SAR 10,000 in December 2025. The rules limit the number of instalments to a maximum of 12 instalments, with collections processed via electronic channels. A customer's actual available limit may be lower, depending on their eligibility, existing financial obligations, and provider or store conditions. SAMA Rulebook

Credit Bureau Checks are Part of the Assessment

The regulations mandate that providers review the customer's credit record upon their consent, and register and update their data with one or more licensed credit information companies throughout the engagement. As such, the service must not be marketed as being independent of credit reporting, nor should promises be made that defaults will not impact credit records. SAMA Rulebook

The regulations also prohibit offering the service to individuals under 18 Hijri years of age, while all other eligibility and risk assessments remain at the provider's discretion. SAMA Rulebook

Which BNPL Companies Operate in Saudi Arabia?

To verify licensed entities and their permitted activities, refer to the List of Finance Companies at the Saudi Central Bank. The official register is the definitive source for licence verification, and corporate legal names may differ from consumer-facing brand names. sama.gov.sa

For Salla stores operating in Saudi Arabia, integrated options include: Tabby, Tamara, Madfoat, Emkan, and MIS Pay. Availability of integration does not imply automatic approval for every store; each provider maintains specific requirements regarding business activity, documentation, product categories, and contracting. help.salla.sa

When evaluating options, start with your store and customer base, and request clarity from each provider on the following:

• Eligibility of your business sector and product line.

• Transaction commission rates and any other contractual fees.

• Settlement payout schedules.

• Order value limits and plans available to customers.

• Processes for cancellations, as well as full and partial refunds.

• Merchant obligations during chargebacks or transaction disputes.

Do not rely solely on the number of instalments as your selection criterion; settlement cycles or the ease of handling returns often have a greater impact on your store's day-to-day operations.

Pros and Cons of BNPL for Merchants

Greater Flexibility at Checkout

Splitting payments into instalments can assist customers who want the product but prefer managing their expenses over a longer period. This remains contingent on their repayment capacity and provider approval, rather than serving as an incentive to overspend.

Potential to Boost Conversion Rates

If paying the full sum upfront is a barrier, BNPL can remove this friction for certain shoppers. However, offering the service will not resolve issues like unexpected shipping costs, poor product descriptions, or unclear return policies.

Use Abandoned Cart Reports to analyse drop-offs, then assess performance after activating the service, rather than assuming a single payment option will resolve checkout friction. help.salla.sa

Costs to Account for in Profit Margins

As confirmed by the Salla team, provider transaction fees vary according to each merchant's contract, and Salla does not have visibility into these agreements. Obtain your quote directly from the provider, and calculate your net profit after factoring in cost of goods, shipping, discounts, and payment commissions before making a decision.

An average order value may increase while net margins decrease. Therefore, align your assessment with net profitability rather than gross revenue alone. You can also refer to the article on Designing Offers to Increase Cart Value in a Fashion Store to see how promotions and product assortment work alongside flexible payments.

Returns Require Coordinated Workflows

Receiving returned merchandise and issuing a financial refund are separate actions requiring oversight. Clarify for your team where refunds are executed, how to ensure they are logged with the provider, and what to communicate to the customer. Do not promise customers that their instalments will halt immediately upon returning an item before the transaction has been fully processed.

How to Activate BNPL on Your Salla Store

According to Salla, you need a verified store and an active paid subscription plan, alongside meeting the requirements of your chosen provider. Required documentation and permitted business categories may differ across companies.

Navigate to Payment Methods in your dashboard, select the provider, and submit the activation request, contract details, or API credentials as directed. Once approved, verify that the option appears for eligible orders and that its terms are clearly presented to the shopper.

Links for all five providers are available in the Official Payment Methods Activation Guide. help.salla.sa

Following activation, monitor completed orders, average order values, net margins, and return rates across comparable periods. The outcome that matters is an enhanced customer journey and measurable value for your store, not merely displaying another logo at checkout.

Frequently Asked Questions About BNPL

Is BNPL completely free for the customer?

Review the terms of the plan shown before completing the order; "fee-free" does not apply across all scenarios. Regulatory caps permit administrative charges, and late penalties may apply according to established rules and provider terms. Merchants, however, are strictly prohibited from passing any additional surcharge onto customers for selecting BNPL.

Is the maximum order limit SAR 10,000?

Not necessarily. That figure represents the updated regulatory ceiling for an individual's total outstanding financing balance across the market, whereas the approved order value depends on the customer's available credit limit and store or provider rules.

Does BNPL affect SIMAH credit records?

The service involves checking, reporting, and updating credit information with licensed credit bureaus in accordance with the regulations. Therefore, late payments or defaults can affect a customer's credit record; review provider terms and current liabilities accordingly.

How do I process a refund for a BNPL order?

As confirmed by Salla, refunds for Tamara orders can be processed directly within Salla, whereas refunds for Tabby, Madfoat, Emkan, and MIS Pay must be initiated via the provider’s merchant portal. Ensure that the financial refund is fully executed in addition to updating the order status in your dashboard.

Do I need to activate all BNPL providers?

Select what aligns with your business model, target audience, and operational capacity. Begin by comparing costs, settlement cycles, and refund handling, then evaluate performance metrics before onboarding additional providers.

If you are launching a new venture, create your store on Salla, complete your store verification, and choose the right plan and payment providers to deliver the checkout experience your customers expect.