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

Regulatory Rules A Prepaid issuer or acquirer operating in the Kingdom of Saudi Arabia shall be allowed to issue or acquire prepaid payment services within all acceptance categories (Open Loop, Restricted Loop, Closed Loop) & prepaid payment service segments (Payroll Cards, Youth Cards, etc.) in both the reloadable & non-reloadable variants, as long as the requirements contained within these rules are me 2.3 Know Your Customer Requirements No: BCT/15631 Date(g): 2/5/2012 | Date(h): 11/6/1433 Status: Modified The general rules for Know Your Customer (KYC) are set out in " Rules Governing Anti-Money Laundering (AML) & Combating Terrorist Financing (CTF) ", Issued by Saudi Central Bank, Section 4.3. For prepaid products the entity responsible for KYC purposes is the regulated entity permitted to issue prepaid products. Depending on the classification of the prepaid payment service proffered, KYC obligations for prepaid payment accounts or electronic records will require either a full verification of the primary cardholder or non-verification. Specifically, KYC requirements for open loop prepaid services will require full verification Closed loop cards will not require verification for the primary cardholder within certain constraints. 2.3.1 Full Verification Open loop and/or reloadable prepaid payment service products are allowed to be issued to an individual provided a Full Verification process has been undertaken: a) As a result of a written Request from the Contracting entity OR an electronic request in accordance with SAMA E-banking Rules clause 4.1(ii), (which allow for online, internet based account application, provided certain security considerations are taken into account) for the account/electronic record and payment device; b) Where an acceptance by the primary cardholder of the Terms and Conditions relating to the prepaid payment service is obtained by signature; c) As a renewal of, or substitute for, an existing prepaid payment service. Full verification is the process by which the Issuer or an authorised third party obtains and verifies the prepaid accountholder’s identity. Accountholders whose identity has been fully verified shall have a prepaid payment service with the full functionality as determined by the Issuer. Full verification is conducted face-to-face (refer to (100-8) interviewing the customer in Rules governing the opening of bank accounts & general operational guidelines in Saudi Arabia ). The face to face verification process requires a government issued document with primary cardholder's full name and photograph. The accepted documents are the same as mentioned in the rules of opening bank accounts . In addition, for those who are not resident in the Kingdom and are in Saudi Arabia to perform Hajj & Omrah or to provide professional consultancy services for government agencies or for a local commercial entity, the accepted documents are a valid passport with valid Saudi visa. Merchants will not be entitled to conduct the full verification due to the potential conflict of interest. The Issuer remains responsible for the verification process and is officially required to produce the verification information on demand by SAMA. d) The issuer may issue prepaid services using existing KYC details provided that one of the following conditions is satisfied: 1. The accountholder is requesting a prepaid payment service from an issuer that has already conducted the full verification of the accountholder , OR 2. The accountholder is replacing a prepaid payment service device from an issuer that has already conducted the full verification of the accountholder. * Please refer to section (100-12) presence of customer from the account opening rules, fifth update, issued pursuant to Circular No. (65681/67) dated 01/11/1440 H, corresponding to 03/07/2019 G , which replaced the above-mentioned account opening rules.