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

Rules for Opening Prepaid Electronic Records that Use a simpler form of KYC For Prepaid Payment Electronic Records that uses a simpler form of KYC the following applies: 1- A master account shall be opened under the name of the contracting entity. 2- Electronic record or ‘sub-records’ (subaccounts of the master account) shall be opened for every card issued in the programme. 3- Such card can be: a) used within a closed or restricted loop arrangement different from SPAN access points b) used at specified SPAN access points. 4- Sub-records’ (the card accounts) shall not be allowed to accept cash deposits or any credit entries other than at the issuance of the card. 5- No statements shall be required for issue. Instead, the cardholder can request a balance enquiry at participating merchant outlets. 6- No signature specimens of the customers are required to be obtained. 7- Transactions facilitated through such cards shall be limited to PoS purchase (excluding cash back option) up to the amount deposited in the card record at the time of activation of the card. 8- A special design shall be adopted for the above-mentioned cards which is different from the design specification for SPAN Prepaid cards. The card will not carry the SPAN Logo 9- Card expiry is to be within 2 years of issue. 10- The above-mentioned service shall be rendered to eligible entities having a relationship with the issuer. 11- Such accounts must be open under the approval of the compliance officer at the bank according to procedures set by the bank based on its customer categorization process. 12- All programs must comply with the regulatory rules for prepaid payment services in the Kingdom of Saudi Arabia. 2.5 Anti-Money Laundering & Control of Terrorist Financing The general rules for Anti-Money Laundering (AML) are set out in the Saudi Arabian " Anti Money Laundering (“AML”) law " and " Rules Governing Anti-Money Laundering & Combating Terrorist Financing ", Section 4.2. Any prepaid product must comply with all anti-money laundering/combating financing of terrorism guidelines already implemented in the Kingdom of Saudi Arabia. 2.5.1 Anti-money laundering regulations Anti-money laundering regulations are designed to prohibit the funding of prepaid accounts with financial money from criminal activities. 2.5.2 Issuer compliance Irrespective of the number of parties with whom the Issuer may share the issuing activities, the issuer remains liable for ensuring compliance of its prepaid programme(s). If necessary, additional systems, procedures and controls must be deployed by the issuer to ensure compliance with these guidelines. 2.5.3 Monitoring of payment service activity The issuer is required to monitor on an on-going basis the prepaid payment service activity by undertaking the following tasks and verifying to SAMA their compliance with the Kingdom's AML legislation: Keep up to date the primary cardholder’s verification data (as described in 2.3 ) held on record as required according to the Anti-Money Laundering (“AML”) law in the Kingdom of Saudi Arabia , Article 5 Verify transaction records at regular intervals, where the frequency will depend on the level of risk attributed to the primary cardholder, to ensure that these fall within the scope agreed in the contract established with the primary cardholder; Maintain a log of all the transactions undertaken using the prepaid payment services. This data must be available for scrutiny by SAMA as appropriate when requested; Report suspicious activity promptly to Financial Intelligence Unit if it suspects that funds loaded onto the prepaid account are the proceeds of criminal activity; Such monitoring to be undertaken by the Financial Intelligence Unit as defined in the "Anti Money Laundering (“AML”) law" and " Rules Governing Anti-Money Laundering & Combating Terrorist Financing ", Section 4.2; Conduct transaction screening as well as account and primary cardholder behaviour monitoring, to identify any unusual activity;