22 Oct 2025

Tabby & Consumer Finance in Saudi Arabia: Between Regulatory Opportunities and Rising Oversight

Saudi Arabia’s fintech sector, particularly Buy Now, Pay Later (BNPL) services, is experiencing unprecedented growth. Leading players like Tabby and Tamara have attracted massive investments and expanded rapidly, while Al Rajhi Bank recently entered the market with its “Tasaheel” installment program. As competition intensifies, the future of this sector hinges on anticipated regulatory tightening, which could reshape the industry landscape.

What Is Tabby?

Tabby is a fast-growing BNPL fintech company in Saudi Arabia that enables customers to defer payments for goods and services to a later date — post-purchase. This model creates a structured financial relationship between buyer and seller defined by contract.

According to Article 1 of the 2023 BNPL Regulatory Rules issued by the Saudi Central Bank (SAMA), BNPL activity refers to the interest-free financing of a customer’s purchase of goods or services from merchants.

Is Stricter Oversight Coming for BNPL?

While BNPL providers currently operate under lighter regulations than traditional lenders, signs are pointing toward more stringent oversight, such as:

1. Mandatory Credit Reporting (SIMAH Registration):

Not all BNPL transactions are currently reported to the national credit bureau, giving BNPL an advantage over traditional financing. However, regulators may soon require all BNPL activities to be recorded, which could dramatically alter the competitive environment.

2. Tighter Lending Limits:

BNPL providers are now capped at lending up to 20x their capital. With the sector’s rapid expansion, authorities may reassess these limits to prevent systemic financial risks.

3. Capital Reserve & Solvency Requirements:

Unlike traditional finance companies, BNPL firms are not currently subject to capital adequacy or solvency rules. New regulations may require such safeguards, impacting BNPL business models and increasing operational costs.

Al Rajhi’s “Tasaheel” – A New Bank Challenger?

Al Rajhi Bank’s “Tasaheel” program offers installment plans of 3–12 months with 0% interest, starting from SAR 1,000. Though similar to BNPL, several key differences exist:

Limited to bank clients only, unlike Tabby or Tamara’s open-access models.
Requires post-purchase customer service contact for approval, limiting user convenience compared to BNPL’s instant approvals.
Backed by significantly higher capital, enabling Al Rajhi to finance larger purchases.

Despite this move, banks have yet to replicate the seamless user experience of BNPL players, keeping fintech firms ahead—for now.

Key Regulatory Differences: BNPL vs. Traditional Lending

BNPL services enjoy regulatory flexibility that has accelerated their growth. Key distinctions include:

No Debt-to-Income (DTI) Ratio Requirements:
Traditional lenders must apply responsible lending standards. BNPL transactions under SAR 2,000 are exempt.
Lower Capital Requirements:
Traditional lenders require SAR 50–200 million in capital. BNPL firms can start with as little as SAR 5 million.
Selective Credit Reporting:
Banks must report all loans to SIMAH, while BNPL providers are not yet obligated to do so.
Flexible Pricing & Business Models:
BNPL firms typically charge merchants rather than consumers, unlike banks, which face strict fee and interest regulations.

Tabby’s Market Valuation Update

Tabby is now Saudi Arabia’s first fintech unicorn, reaching a valuation of $3.3 billion, making it the most valuable BNPL company in the Middle East. Beyond installment payments, Tabby has launched:

Tabby Cards for physical retail
Tabby Shop, its proprietary online marketplace

This growth signals a transition toward becoming a fully integrated financial platform. However, with success comes attention — and likely greater regulatory pressure in the future.

What Lies Ahead for BNPL in Saudi Arabia?

As the sector matures, four potential scenarios could unfold:

1. Tighter Regulation by SAMA:

New rules (e.g., full SIMAH registration, higher capital thresholds) could slow BNPL growth and force business model changes.

2. Bank Acquisitions of BNPL Firms:

Banks may eventually acquire BNPL companies rather than compete directly—especially if BNPL firms threaten their market share.

3. Entry of New Fintech Players:

Rapid sector growth is likely to attract more startups, increasing competition and innovation.

4. Regional Expansion:

To offset local constraints, leading firms like Tabby and Tamara may scale into GCC and nearby markets.

BNPL companies are among the fastest-growing financial players in Saudi Arabia. Yet, they now face a crossroads: continue rapid expansion or navigate tighter regulatory scrutiny.

As this landscape evolves, the competition between traditional banks and agile fintechs will be a key factor in shaping the Kingdom’s financial future.

Given the recent regulatory framework issued by the Saudi Central Bank, BNPL companies need specialized legal guidance to ensure compliance. At Al-Salama Law Firm, we provide expert legal counsel tailored to the financial sector, with deep experience in fintech, regulation, and corporate structuring.