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

General Prepaid Payment Service Issuing Rules 2-1-A Closed loop Prepaid Payment Services A close loop prepaid products may or may not be reloadable. Closed loop prepaid payment services are not allowed to provide cash withdrawal functionality at ATMs or transfer of funds into a bank account. An issuer (refer to 1.2.1 Issuing Programme Manager ) proposing to operate closed loop prepaid programme must seek SAMA’s “no objection” to the proposed programme at a contracting entity level. A closed loop prepaid payment service issued in the Kingdom is not allowed to provide cross- border payment functionality, unless permitted by SAMA. 2-1-B Restricted Loop Prepaid Payment Services A restricted loop prepaid products may or may not be reloadable. Restricted loop prepaid payment service product is not allowed to provide cash withdrawal functionality at ATMs or transfer of funds onto a bank account. Any Issuer (refer to 1.2.1 Issuing Programme Manager ) proposing to operate restricted loop prepaid programme must seek SAMA’s “no objection” to the proposed programme at a contracting entity level. A restricted loop prepaid payment service issued in the Kingdom is not allowed to provide cross-border payment functionality, unless permitted by SAMA. 2-1-C Open Loop Prepaid Payment Services Open loop prepaid products may or may not be reloadable. An open loop prepaid payment product can, but is not required to, enable cash withdrawals at ATMs or the transfer of funds onto a bank account, including international remittances within the restrictions of Know Your Customer (KYC) and Anti Money Laundering (AML)/Combating Terrorist Financing (CTF) rules documented in Section 2-5 . Any Issuer (refer to 1.2.1 Issuing Programme Manager ) proposing to operate open loop prepaid programme must seek SAMA’s “no objection” to the proposed programme at a product level. 2-1-D Outsourcing Regulated Issuers (Refer to The issuing Programme Manager (issuer) 1-2-1 ) may outsource activities within the KSA to trusted third parties under an outsourced service contract, provided that the regulated issuer assumes the responsibility for all actions undertaken by a third party. In accordance with the " Rules on Outsourcing ", issued by Saudi Central Bank, section 2-3 , banks are required to confirm SAMA has "no objection" prior to undertaking any Material Outsourcing. 2.1.1 All disclosures All disclosures required by these Rules shall be made in the Arabic language and utilise the Hijrah calendar and/or using the Gregorian calendar. Disclosures in the English language shall be provided at the primary cardholder’s request. Any Operator must be a licensed bank in the Kingdom of Saudi Arabia that is permitted to accept deposits, according to the Banking Control Law, issued by Royal Decree, No. M/5 Dated 22.2.1386 H . These rules have been issued in a bilingual form in Arabic and English. In case of any difference in the meaning or interpretation of the text, the Arabic text will prevail. The English language will be referred to only for the purpose of assisting in understanding these rules. 2.1.2 Disclosure requirements All disclosure requirements contained in these Regulatory Rules apply to products offered in totality by a business approved by SAMA to issue prepaid payment services. Where a joint product is offered the disclosure requirements apply to the business approved by SAMA to issue prepaid payment services. 2.2 License to Issue and/or Acquire prepaid Payment Services 2.2.1 Banking license To issue a prepaid payment service product or acquire prepaid payment service transactions a financial institution must be a licensed bank in the Kingdom of Saudi Arabia, according to the Banking Control Law, issued by Royal Decree, No. M/5 Dated 22.2.1386 H , and licensed to provide financial services within the Kingdom of Saudi Arabia, with SAMA’s “no objection” prior to introduce any prepaid product.