Article 5 of the Saudi Payments and Payment Services Law
المادة 5 من نظام المدفوعات وخدماتها
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 تطبيق أحكام النظام.
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 5 explained in plain English
This article deals with the situation of someone who works in payments from outside the Kingdom. A person or company may reside outside the Kingdom while its activity reaches inside it. For this reason the article gives the Central Bank the power to set:
- The cases in which a person residing outside the Kingdom is treated as an operator of payment systems or a provider of payment services inside the Kingdom.
- The criteria on which this treatment is based.
The stated purpose is to apply the provisions of the Law to him. That is, a person to whom these cases and criteria apply is treated, for the purposes of the Law, as if he were carrying on the activity inside the Kingdom, so its provisions apply to him, including the prohibition in Article 4 on operating payment systems or providing their services without a license from the Central Bank.
The article itself does not state these cases or criteria, but leaves setting them to the Central Bank; so it cannot be said from the text alone whether a particular activity from abroad is or is not subject to the Law.
Foreign companies that provide payment services to users in the Kingdom would do well to consult a lawyer specializing in banking and finance and payment systems to learn their position.
Practical example
A company registered outside the Kingdom offers a money transfer app, which residents of Riyadh use. To know whether the company is treated as a payment service provider inside the Kingdom, one refers to the cases and criteria set by the Central Bank; if they apply to it, it becomes subject to the provisions of the Law.
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 5 of the Saudi Payments and Payment Services Law
Are foreign payment companies subject to the Saudi Payments Law?
The Central Bank sets the cases and criteria in which a person residing outside the Kingdom is treated as an operator or service provider inside it. If they apply to him, the provisions of the Law apply to him.
Where do I find the criteria for treating a foreign company as a payment services provider in the Kingdom?
The article does not state them; it makes setting them a power of the Central Bank.
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 3
Sets the scope of the Law: payment systems and their operators, and payment services and their providers.
يسري النظام على نُظم المدفوعات ومشغليها، وخدمات المدفوعات ومقدميها.
- 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.