MUSCAT, FEB 23
Ahmed bin Jaafar al Musalmi, Governor of the Central Bank of Oman, issued a decision promulgating regulations governing the rollout of "Buy Now, Pay Later" (BNPL) schemes — an initiative that will enable consumers in the Sultanate of Oman to join a global market projected to grow from $28.44 billion in 2026 to nearly $83.36 billion by 2034.
Regulating the sector promotes financial stability by curbing unregulated practices in short-term consumer finance. Furthermore, capital and collateral requirements reduce the risk of sudden bankruptcy and protect customer rights.
The activity involves short-term financing provided by a licensee to a customer without collateral, for the purpose of purchasing goods and services through monthly instalments, repaid to the licensee on the agreed-upon dates.
The decision stipulates that the regulations prohibit engaging in this activity without a licence. The licence is granted to legal entities that take the form of an Omani company wholly owned by Omanis or with non-Omani shareholders, according to the percentage of ownership.
In addition, an economic feasibility study is required, including a strategic vision for the activity, financial projections for the first five years, a business plan and arrangements with licensed banks or payment service providers, if any and with providers of goods and services.
The regulations authorise the Governor, in cases he deems appropriate, to grant exceptions to some licensing conditions if the proposed business model contributes to providing these services to the public who lack access to banking and financial services; and encourages the activity to reach remote or underserved areas.
The activity must commence within six months of obtaining the licence and a branch may not be established without the approval of the Central Bank. The regulations outline obligations and prohibitions, as well as adherence to specific terms and conditions for conducting business. These include: verifying the client's financial solvency and credit history, ensuring their ability to repay, documenting all transactions with clients with the necessary paperwork, guaranteeing fair and reasonable dealings with clients, maintaining transparency and disclosure, providing appropriate mechanisms for the immediate handling of client complaints and prohibiting service to individuals under 18 years of age, clients outside the Sultanate of Oman, or in currencies other than the Rial Omani.
It also prohibits licensees from exceeding ten times their paid-up capital at any time, engaging in any unlicensed business or activities, introducing new products without authorisation, or advertising false, inaccurate, or misleading offers.
The regulations mandate a financial guarantee of RO 10,000 or 2% of the paid-up capital, whichever is higher, with a maximum limit of RO 100,000.
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