Article 3 of the Saudi Payments and Payment Services Law
المادة 3 من نظام المدفوعات وخدماتها
Sets the scope of the Law: payment systems and their operators, and payment services and their providers.
Official text (Arabic)
This article has not been amended since the law was issued.
يسري النظام على نُظم المدفوعات ومشغليها، وخدمات المدفوعات ومقدميها.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article answers the question: to whom does the Law apply? It names four categories:
- Payment systems, which under Article 1 are the set of tools, procedures and rules for processing payment orders, settling them and the related clearing operations, inside the Kingdom or outside it.
- The operators of these systems.
- Payment services, which under Article 1 include carrying out operations to pay and transfer funds and process them, managing transfers and electronic cash payments, electronic payment wallets, payment information and account services, and other services the regulations specify.
- The providers of these services.
So the Law applies to the activity itself (the system or the service) and to whoever carries it on (the operator or provider). Since the definition of payment services refers to other services specified by the regulations, the scope of the Law may widen as far as the regulations add to it.
This scope comes in the context of the aims of the Law in Article 2, and is followed in Article 4 by the prohibition on operating payment systems or providing their services in the Kingdom without a license from the Central Bank. Anyone wondering whether a particular activity is subject to the Law would do well to consult a lawyer specializing in banking and finance and payment systems.
Practical example
A start-up in Jeddah is developing an app that lets users keep a balance in an electronic wallet and pay stores from it. This activity falls within the definition of payment services because it includes electronic payment wallets, so the company is a payment service provider and the Law applies to it.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Payments and Payment Services Law
Does the Payments Law apply to e-wallet companies?
The Law applies to payment services and their providers, and the definition of payment services in Article 1 expressly includes payment wallets in the form of electronic accounts or records.
To whom does the Payments and Payment Services Law apply?
To payment systems and their operators, and to payment services and their providers.
More articles on Definitions and Objectives of the Payments Law
- Article 1
Defines the key terms of the Payments and Payment Services Law, such as payment systems and services, payment order, member, customer, consumer, collateral and settlement finality.
يقصد بالكلمات والمصطلحات الآتية -أينما وردت في هذا النظام- المعاني الموضحة أمام كل منها، ما لم يقتضِ السياق غير ذلك: النظام: نظام المدفوعات وخدماتها. البنك المر
- Article 2
Sets three aims of the Law: the soundness of the payments infrastructure, protecting the rights of those who deal with it, and encouraging innovation and competition in this field.
يهدف النظام إلى ما يلي: 1- تعزيز سلامة وكفاية البُنى التحتية لنظم المدفوعات وخدماتها في المملكة. 2- تعزيز حماية حقوق الأطراف المتعاملة مع نظم المدفوعات وخدماتها
- Article 5
Authorizes the Central Bank to set the cases and criteria in which a person residing outside the Kingdom is treated as operating payment systems or providing their services inside it.
يحدد البنك المركزي الحالات والمعايير التي يُعدّ بناء عليها الشخص المقيم خارج المملكة في حكم المشغل لنظم المدفوعات أو المقدم لخدمات المدفوعات داخل المملكة، لغرض
- Article 18
Provides that the regulations of the Payments and Payment Services Law are issued by decision of the Board of Directors of the Central Bank.
تصدر اللوائح بقرار من المجلس.
- Article 19
Provides that the Payments and Payment Services Law repeals every provision that conflicts with it.
يلغي النظام كل ما يتعارض معه من أحكام.
- Article 20
Provides for publishing the Law in the Official Gazette and its taking effect 180 days after the date of publication.
ينشر النظام في الجريدة الرسمية ويعمل به بعد (مائة وثمانين) يوماً من تاريخ نشره.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.