Press Releases
CBK to Test a Buy Now Pay Later (BNPL) Product within its Regulatory Sandbox
In light of the keenness of the Central Bank of Kuwait (CBK) to enable modern financial technologies in the State of Kuwait and to enhance its role in adopting and encouraging innovation, in a way that promotes the introduction of innovative business models, the CBK has allowed a new Buy Now Pay Later (BNPL) product to begin testing by launching thereof in the local market within the Regulatory Sandbox with a group of volunteer customers and merchants to fully assess and evaluate the product before the final launch in the market.
This came in a statement to the CBK, in which it indicated the keenness of the CBK to support innovative Fintech based business models to deliver value-added services to users in particular, and the local market in general. The new product allows customers to purchase from the participating online retailers and pay online in a flexible and deferred manner. The future payment is either done as a one-time payment, or as low amount specified installments, without imposing any interests or fees on customers. The product provides the merchant with an opportunity to provide his products and services to customers, manage his banking operations easily, and view all details of purchases, payments and return processes.
CBK stated that it aims to develop supervisory policies and instructions to support the new business models in the financial services industry, adding that new instructions are being drawn to regulate BNPL in the Kuwaiti market and to define the legal aspects of this activity.
The Central Bank of Kuwait highlighted the role the Regulatory Sandbox Framework plays in providing a safe environment to assess, evaluate and enhance Fintech products. This in turn encourages innovation and increases the efficiency of these innovative business models through identifying their regulatory requirements and enhancing risk management, without undue risk to the financial and banking system.
CBK concluded its statement by re-affirming its commitment to its role as a catalyst and will deploy the latest technology to contribute to the achievement of Kuwait Vision 2035 “New Kuwait”.
