Saudi Arabia Buy Now Pay Later Business and Investment Opportunities Databook – 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q2 2024 Update

Saudi Arabia Buy Now Pay Later Business and Investment Opportunities Databook – 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q2 2024 Update

According to PayNXT360, BNPL payments in the country are expected to grow by 16.2% on an annual basis to reach US$1,311.8 million in 2024.

The medium to long-term growth story of the BNPL industry in the country remains strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 10.8% during 2024-2029. The BNPL gross merchandise value in the country will increase from US$1,128.9 million in 2023 to reach US$2,186.7 million by 2029.The rising adoption of flexible payment solutions is aiding the growth of the buy now pay later industry in the Kingdom of Saudi Arabia. PayNXT360 expects the trend to further continue over the medium term. To meet the rising demand for buy now pay later products, firms are also raising funding rounds, targeting higher gross merchandise value and volume in the market.

Key Developments in the BNPL Sector in Saudi Arabia
Over the past few months, the Buy Now, Pay Later (BNPL) sector in Saudi Arabia has witnessed several significant product launches. Key developments include:
• ToYou Super App: In 2023, ToYou, a Saudi-based super app, introduced its BNPL service. This new feature aims to enhance the shopping experience by offering flexible payment options, reflecting the growing trend of integrating BNPL solutions into multi-functional apps.
• Tamara's New Offerings: Tamara, a leading BNPL provider in Saudi Arabia, continues to innovate within the sector. While specific new products were not mentioned, the company is expanding its services to meet the rising demand for flexible payment solutions in the country’s rapidly growing e-commerce landscape.
These product launches and expansions highlight the competitive and rapidly evolving nature of the BNPL market in Saudi Arabia, driven by increasing consumer demand for flexible payment options and the expanding e-commerce sector in the region.

Strategic Partnerships

Over the past few months, several key partnerships have been established in Saudi Arabia’s Buy Now, Pay Later (BNPL) sector. Notable collaborations include:
• Tamara and Various Retailers: Tamara, a leading BNPL provider in Saudi Arabia, has been actively expanding its partnerships with local and international retailers to enhance its service offerings. These collaborations aim to facilitate BNPL options at checkout, broadening Tamara’s market reach.
• Tabby and E-commerce Platforms: Tabby, another major BNPL provider, has strengthened its partnerships with e-commerce platforms to integrate its payment solutions. This move is intended to improve customer access to BNPL services, allowing consumers to use flexible payment options across a wider range of online shopping experiences.
• ToYou Super App: In 2023, the Saudi-based super app ToYou launched its own BNPL product, aiming to enhance users' shopping experience. This initiative involves strategic partnerships with merchants to integrate BNPL solutions into the platform, boosting user engagement and streamlining transactions.
These partnerships highlight the growing collaboration between BNPL providers and retailers in Saudi Arabia. They reflect the sector’s expansion and the rising demand for flexible payment solutions amid the country’s booming e-commerce landscape.

Mergers and Acquisitions

The Buy Now, Pay Later (BNPL) sector in Saudi Arabia has recently seen significant mergers and acquisitions developments. Below are some of the key highlights:
• Tamara’s Acquisition of PayTabs: In early 2024, Tamara, a prominent BNPL provider in Saudi Arabia, acquired PayTabs, a payment solutions provider. This strategic acquisition will enhance Tamara’s payment processing capabilities and expand its service offerings. Integrating PayTabs’ technology allows Tamara to offer a more streamlined experience for both consumers and merchants.
• Tabby’s Expansion and Investment: While not an acquisition, Tabby, another leading BNPL provider, secured a $50 million funding round in late 2023. The funds are earmarked for strategic partnerships and potential acquisitions in the BNPL space, highlighting Tabby’s focus on growth through consolidation.
• Emerging Players and Strategic Alliances: New market entrants like ToYou, a super app that recently launched its BNPL service, are forming partnerships with established retailers to strengthen their market presence. Though these initiatives are not formal mergers or acquisitions, they reflect a trend toward consolidation as companies align with established players for competitive advantage.
• These developments signal a dynamic BNPL landscape in Saudi Arabia, marked by strategic acquisitions and collaborations to enhance service offerings and expand market reach. With the BNPL market expected to reach $1.69 billion in 2024, further consolidation is likely as companies seek to leverage the growing e-commerce ecosystem.

Regulatory Changes

Over the past few months, a significant regulatory development in Saudi Arabia’s Buy Now, Pay Later (BNPL) sector has been the introduction of new rules by the Saudi Central Bank to govern the rapidly expanding industry:
New Regulatory Framework
In December 2023, the Saudi Central Bank introduced new regulations for BNPL providers operating in the Kingdom. Key features of the framework include:
• Licensing Requirements: BNPL companies must now obtain licenses from the Central Bank to offer short-term credit to consumers.
• Information Security Standards: Providers must comply with strict data security protocols to protect consumer information and prevent financial crimes.
• Consumer Protection Measures: The regulations limit credit and operational activities to safeguard consumers from excessive debt and high fees.
Promoting Sustainable Growth
• These new regulations are expected to support the sustainable growth of the BNPL market in Saudi Arabia over the medium term. By establishing clear guidelines and standards, the Central Bank aims to encourage responsible lending practices while fostering innovation within the sector.
Alignment with Global Trends
• The Saudi Central Bank’s approach aligns with regulatory changes in other countries, such as the United Arab Emirates, where similar guidelines require BNPL providers to obtain licenses. These new rules reflect the Saudi government’s commitment to consumer protection while allowing the BNPL industry to thrive within a regulated framework. As the market continues to expand, driven by the rise of e-commerce, the new regulations are poised to provide a solid foundation for the sector’s ongoing development.

The BNPL payment industry in Saudi Arabia has recorded strong growth over the last four quarters, supported by increased e-commerce penetration.

This report provides a detailed data-centric analysis of the Buy Now Pay Later (BNPL) industry, covering market opportunities and risks across a range of retail categories. With over 75 KPIs at the country level, this report provides a comprehensive understanding of BNPL market dynamics, market size and forecast, and market share statistics.

It breaks down market opportunities by type of business model, sales channels (offline and online), and distribution models. In addition, it provides a snapshot of consumer behaviour and retail spending dynamics. KPIs in both value and volume terms help in getting an in-depth understanding of end market dynamics.

PayNXT360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.