Central Bank of Kuwait (CBK) has updated its Instructions for Regulating the Electronic Payment of Funds, first issued in 2018, to include buy-now-pay-later (BNPL) activities.
The new of instructions have been issued following a round of public consultations with stakeholders after a draft was made public in early 2022.
These instructions outline the mandatory requirements that must be met by existing and new financial firms to practice the activity of electronic payment or electronic money, or to operate electronic payment systems according to five types of licenses differing as per the size and nature of the activity.
“With the goal of enhancing the safety and stability of payment systems in the State of Kuwait, the instructions spell out the regulatory requirements and controls that must be adhered to by those institutions. These include governance, a risk management framework, combating money laundering and terrorist financing, cyber security, business continuity and customer protection,” the CBK said in a statement.
One of the salient additions to the instructions is the inclusion of BNPL activities to protect customers.
In October, the regulator said it would be testing a new BNPL product within its regulatory sandbox with a group of volunteer customers and merchants to fully assess and evaluate the product before the final launch in the market.