Your customer may reach the checkout page convinced by the product, only to pause at the total amount required upfront in a single payment. At this moment, Buy Now, Pay Later (BNPL) can offer them the flexibility needed to complete the purchase, while opening up other considerations for you as a merchant: service commission, payout settlement timing, and how to handle returns.

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

What Is Buy Now, Pay Later (BNPL)?

Buy Now, Pay Later (BNPL) is a financing service that allows a customer to purchase a product or service and pay for it at a later date or in agreed-upon installments. The acronym BNPL stands for "Buy Now, Pay Later". In Saudi Arabia, BNPL activity is regulated by the Saudi Central Bank (SAMA), with provider terms and the available plan determining the repayment details and overall cost.

For the merchant, the significance of the service stems from a familiar scenario: a customer has selected the product and recognized its value, yet hesitates to pay the full amount at once. Offering an installment option can help them complete a purchase tailored 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 profitability, rather than adopting it simply 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 methods during checkout, and is then redirected to the provider's workflow to verify identity and eligibility. Upon approval, the available plan is presented—detailing any down payment required, payment due dates, and any disclosed fees—for the customer to accept before completing the transaction.

Selecting the service does not guarantee approval for every order; approval depends on the provider’s assessment, the customer’s creditworthiness, their available spending limit, and the transaction terms. Similarly, two customers purchasing the same product will not necessarily receive the exact same payment plan.

For the Merchant

The store contracts with the service provider and completes the onboarding, approval, and integration requirements. Once a payment is successful, the store processes the order according to the verified payment status, and receives payouts based on the settlement schedule, commission rates, and terms stipulated in its agreement.

Here, it is crucial to distinguish between customer installment plans and merchant settlement: the customer’s repayment schedule alone does not dictate when funds reach your bank account. Review your contract regarding transfer schedules, deductions, party responsibilities, and procedures for chargebacks and refunds before calculating the service's impact on your cash flow.

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

What Are SAMA’s Regulations for BNPL?

The BNPL Regulatory Rules define the operational framework for this activity in the Kingdom. Here are the key points both merchants and customers need to understand, taking subsequent regulatory amendments into account.

Provider Licensing Differs from Store Activation

Conducting BNPL financing operations requires licensing from the Saudi Central Bank (SAMA). A store that offers the service through a licensed provider merely completes onboarding, approval, and technical integration with that provider; enabling the payment method does not turn the store into a financing company. SAMA Rulebook

Do Not Pass Your Commission to the Customer

Regulations require the provider to ensure that contracted merchants do not pass on or impose extra surcharges on the customer. Therefore, you must not add an extra fee to offset the provider's commission simply because the customer opted for BNPL. SAMA Rulebook

As for provider fees charged to the customer, these should be reviewed within the plan terms: regulations permit exceptions for late payment fees and collection costs in accordance with established rules, 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 Cap for Every Purchase

SAMA raised the maximum total outstanding financing limit per individual customer to SAR 10,000 in December 2025. The rules limit the number of installments to a maximum of 12 installments, with collection conducted via electronic payment channels. A customer's actual available limit may be lower based on their creditworthiness, existing obligations, and the specific terms of both the provider and the store. SAMA Rulebook

Credit History Is Part of the Assessment

The rules mandate that the provider review the customer's credit record upon their consent, and register and update their data with one or more licensed credit bureaus throughout the business relationship. Therefore, it is incorrect to market the service as being outside credit reporting or to promise that payment delays will not affect one's credit profile. SAMA Rulebook

The regulations also prohibit offering the service to individuals under 18 Hijri years of age, while all other eligibility and underwriting criteria remain subject to the provider’s discretion. SAMA Rulebook

Who Are the BNPL Companies in Saudi Arabia?

To verify licensed entities and their authorized activities, refer to the List of Finance Companies at the Saudi Central Bank. The official list serves as the authoritative source for licensing verification, and legal corporate names may differ from the commercial trade names known to consumers. sama.gov.sa

On Salla stores in Saudi Arabia, available integration options include: Tabby, Tamara, Madfoat, Emkan, and MIS Pay. Technical availability does not guarantee automatic merchant approval; each provider has distinct requirements concerning business activity, verification, catalog types, and contracting. help.salla.sa

When comparing providers, start by assessing your store and customer base, and request clarity from each provider on the following points:

• Acceptance of your business category and product catalog.

• Transaction fees and any other contractual costs.

• Settlement timelines for your payouts.

• Order value limits and installment plans available to customers.

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

• Merchant responsibilities in disputes, claims, and chargebacks.

Do not base your choice on the number of installments alone; payout timelines or the ease of processing returns may have a far greater impact on your store's day-to-day operations.

Advantages and Disadvantages of BNPL for Merchants

Greater Flexibility in Purchasing Decisions

Splitting payments into installments can support a customer who finds the product suitable but prefers managing cash flow over a longer period. This remains tied to their repayment capacity and provider approval, rather than an encouragement to spend beyond their means.

Opportunity to Improve Checkout Conversion

If paying upfront is a primary cause of hesitation, BNPL can remove that obstacle for certain shoppers. However, the service does not address other friction points, such as hidden shipping fees, weak product descriptions, or ambiguous return policies.

Use Abandoned Cart Reports to analyze incomplete orders, then evaluate the impact post-activation, rather than assuming a single payment option will solve every issue. help.salla.sa

Costs to Account for in Profit Margins

As confirmed by the Salla team, provider fees vary according to each merchant's contract, and Salla does not access these contractual terms. Therefore, obtain a direct quote from the provider and calculate your net profit after product costs, shipping, discounts, and payment gateway fees before committing.

An order's total value may increase while its profit margin decreases. For this reason, base your assessment on actual net profit rather than gross sales figures alone. You can also consult our article on Designing Offers to Increase Cart Value in a Fashion Store to understand the complementary roles of promotional bundling and payment flexibility.

Returns Require Clear Operational Alignment

Accepting returned merchandise and completing the financial refund are two steps that require careful coordination. Clarify to your team where refunds must be executed, how to ensure they are registered with the BNPL provider, and what to communicate to the customer. Never promise a customer that installments will stop simply upon dropping off the item before the transaction is officially processed.

How to Activate BNPL on Your Salla Store

As confirmed by the Salla team, you need a verified store and an active paid subscription plan, alongside fulfilling the criteria of your chosen provider. Required documentation and eligible business sectors may vary across providers.

Navigate to the Payment Methods section in your dashboard, select the provider, and complete the activation request, merchant contract, or integration keys per their instructions. Once approved, confirm that the payment option appears at checkout for eligible orders and that terms are displayed clearly to the shopper.

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

Following activation, benchmark completed orders, average order value (AOV), net margins, and return rates across comparable periods. The meaningful outcome is a genuinely improved customer journey and operational viability for your business—not merely displaying a new logo on your checkout screen.

Frequently Asked Questions About BNPL

Is BNPL Free for the Customer?

Review the specific terms of the displayed plan before completing checkout; "interest-free" or "fee-free" claims do not apply universally. Administrative charges may apply within statutory limits, as well as late fees under regulatory parameters and provider policies. The merchant, however, is strictly prohibited from adding surcharges simply because the customer opted for BNPL.

Is the Maximum Order Limit SAR 10,000?

Not necessarily. This figure represents the aggregate ceiling for total outstanding financing allowed per consumer under updated regulatory rules, whereas the approved order value depends on the individual's remaining credit limit and the specific rules of both the provider and store.

Does BNPL Affect SIMAH Credit Records?

BNPL services are subject to credit bureau inquiries, registration, and reporting with licensed credit bureaus (such as SIMAH) pursuant to regulatory requirements. Delinquency or missed payments may negatively impact a consumer's credit score; review provider disclosures and keep track of your existing liabilities.

How Do I Process a Refund for an Order Paid via BNPL?

As confirmed by the Salla team, refunds for Tamara orders can be processed directly via Salla, whereas refunds for Tabby, Madfoat, Emkan, and MIS Pay must be initiated through the provider's dedicated merchant portal. Ensure the financial refund is finalized in addition to updating the order status in your store dashboard.

Do I Need to Activate Every Provider?

Choose what aligns best with your business model, target audience, and operational capacity. Start by comparing transaction fees, settlement periods, and refund handling, and evaluate performance data before integrating additional services.

If you are launching your business, create your store on Salla, complete your store verification, and select the optimal plan and payment partners to deliver the checkout experience your customers expect.