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

Government entities or juristic persons programmes If the prepaid payment service is a Government or a juristic persons prepaid payment service (see 1.3.2 and 1.3.3 ), the master accountholder/contracting entity shall be responsible for all expenses incurred in processing the payment including bank fees, service provider charges, and all other costs. The Contracting entity is not allowed to share any costs with the primary cardholders, including deducting fees from funds from the account directly or indirectly. However, in the case of sub-records where the cardholder is the beneficial owner, transaction effected directly by the beneficial owner (e.g. ATM and/or POS transactions) which may be chargeable, can be applied to such sub-record. All other expenses related to production and distributions of cards remain responsibility of the contracting entity. 2.8.4 Written contracts The issuer must enter into a written contract with the contracting entity (an individual or a juristic person or government entity) which can be in electronic form. 2.8.5 Contract signature Contracts must be signed by the contracting entity (an individual or a juristic person or government entity). If the contract is entered into online there must be a requirement for a digital signature or exchange of written copies later on. 2.8.6 Contracting entity/Cardholder complaints The issuer must put in place an effective mechanism to attend to any primary cardholder complaints. The contracting entity (an individual or a juristic person or government entity) will also be able to complain to SAMA in accordance with the SPAN rules. 2.8.7 Communication language The use of clear and simple language terms is required in all communications. The Arabic language should be the main communication language. 2.8.8 Honouring primary cardholder payment instructions The issuer shall honour the primary cardholder's instructions for payments, at approved locations, if there is sufficient balance outstanding against the instrument. 2.8.9 Card fees Periodical fees, such as dormancy fees or inactivity charges, shall not be charged to prepaid payment services, except in the circumstances below and provided that these are clearly stated in the terms and conditions: a. There has been no purchase activity using the card in the 3-month period prior to the date on which the charge or fee is imposed; b. Such charge or fee, if any, is reasonable and does not exceed limits set in the circulars "Schedule of Maximum Fees for Prepaid Services", appended and updated by SAMA. 2.8.10 Card expirations Prepaid Payment Services shall be subject to standard SPAN card expiration date, a. The expiration date is at least 3 years after the date on which the prepaid account funds were first loaded, where the card is a smart/EMV card OR B. two years for magnetic stripe cards; AND c. the terms of expiration are prominently disclosed 2.8.11 Unfair contract terms Any term in the contract will be considered unfair if it causes a significant imbalance in the rights and obligations arising under the agreement to the detriment of the account or primary cardholder. Unfair terms will be considered null and void, but shall not affect the validity of any other provisions in the contract. Where there is any doubt as to the meaning of a contractual term, the interpretation should favour the primary cardholder 2.9 Advertising Prepaid Payment Service Products Advertising for prepaid payment service products must follow SAMA regulations for advertising Financial Service Products, including the SAMA circular dated 28 th Safar 1430H- 8th November 2009 , which prohibits banks using names and/or pictures of holy places for any marketing activity. In accordance with the Banking Control Law, issued by Royal Decree, No. M/5Dated 22.2.1386 H, article 23 (5) .