Qatar Central Bank (QCB) is receiving positive feedback on its buy-now-pay-later efforts, attracting over 25 requests in just 48 hours after it opened the application for BNPL licenses.
The central bank, which launched the application process on the 4th September, will be receiving submission until the 3rd November 2023. The regulator did not state how many BNPL licenses it would be granting this year.
The move to officially regulate BNPL providers is to reinforce the payment systems in the State, in line with the Financial Sector Strategy and Fintech Strategy, QCB noted.
Opening the license application follows the release of BNPL regulations last month.
“While BNPL products and services are currently being offered in Qatar, albeit on a limited scale, through licensed financial institutions in Qatar, the BNPL regulations seek to regulate the provision of BNPL products and services via separately licensed BNPL service providers,” explained legal firm Al Tamimi & Co.
The regulations came into effect on the 6th August 2023.
The new framework takes into consideration the offering of both conventional and Shariah compliant BNPL products and services. To offer Islamic structures, the BNPL licensee must appoint a Shariah advisor to advise on the offering’s adherence to Islamic principles. The appointment of the Shariah advisor must be approved by the QCB.
The BNPL market has gained serious momentum in the Middle East, with Precedence Research projecting the sector to be worth about US$90 billion by 2030. That would be a 12-fold surge from US$7.18 billion in 2021. Its interest-free model has attracted numerous start-ups to modify their business model to be Muslim-friendly, making BNPL one of the fastest growing Islamic fintech verticals.