Regulatory Rules for Prepaid Payment Services in the Kingdom of Saudi Arabia

Issuing Program Manager ) to which a transaction can be charged. Such an access device could be a payment card, an internet wallet or a payment device utilising mobile technology. Prepaid instruments encompassed in this regulatory framework include any access device that can provide transactional services against a prepaid balance, including but not limited to: Smart/EMV cards (payment cards with an embedded micro-processor); Magnetic stripe cards (payment cards with a magnetic stripe); Internet wallets (stored value internet accounts) Mobile payments Contactless payments (Near Field Communications technology) 1.1.1. Acceptance Prepaid payment services within these regulatory rules can be used across a range of different acceptance models, or prepaid payment service programmes. These are: Closed loop prepaid Payment Services 2 . A closed loop prepaid payment service is a prepaid product that is redeemable at a single merchant or at an affiliated group of merchants with the same name, mark, or logo 3 . The payment device is purchased on a prepaid basis and is honoured upon presentation at such single merchant or affiliated group of merchants. Closed loop prepaid products may or may not be reloadable. Examples of closed loop prepaid products are: i. Merchant branded gift cards ii. Merchant branded store cards Restricted loop prepaid payment services: A restricted loop prepaid payment service is a prepaid product that is used to acquire goods and services at a limited network of service providers (e.g. fuel stations), either within a clearly limited area or alternatively that can be used to pay for a limited range of goods and services. Restricted loop payment products may or may not be reloadable. Examples of restricted loop prepaid products are: Prepaid payment services that are accepted at different merchants located within a clearly defined area such as shopping cards or mall cards. Other examples include University or campus payment devices, Conference cards, Stadium cards, and other cards that are only accepted within a specific closed venue; Prepaid payment services that are accepted at different merchants, located in different locations but that can only be used to purchase a limited range of goods and services such as Petrol cards, Meal vouchers or Public transport cards 4 . C. Open loop prepaid payment services . Open loop prepaid products are payment instruments that are redeemable at all merchants or service providers where the payment brand is accepted without restrictions. Open loop prepaid products may or may not be reloadable. 2 While closed loop prepaid payment services may be issued under these Rules in the Kingdom of Saudi Arabia, it is not anticipated that they will form the bulk of the programmes on offer 3 Where the prepaid payment service can be used to purchase or access a range of goods or services that are not predetermined at the time the prepaid account is loaded with value (e.g. airtime) 4 For example, transport cards that are accepted by transportation companies (cars, trains and others). 2.1.1. Reloadability The regulatory principle presented herein governs both reloadable and non-reloadable prepaid payment service products. a. Non-reloadable prepaid payment service. A prepaid payment service is non-reloadable if it has no mechanism for having additional funds added to the initial balance after the initial issuance. b. Reloadable prepaid payment service. A prepaid payment service is reloadable if it has the ability of having more funds added after the initial issuance. It is at the discretion of the prepaid Issuer to determine whether a prepaid product should be reloadable or non-reloadable (noting that re-loadable cards are subject to more rigorous KYC and AML requirements). Common to both reloadable and non-reloadable prepaid services is that there is a deposit account that holds the available balance on the account until such a time as it is redeemed through spend against the balance or a cash wi