In the rapidly evolving financial landscape of Saudi Arabia, consumer protection has emerged as a paramount concern. Financial institutions, amongst them Payment Services Providers (PSPs), hold significant influence over the economic well-being of individuals and communities. To ensure that this influence is wielded responsibly, a set of guiding principles were established by the Saudi Central Bank (SAMA) in 2022, designed to safeguard consumers' interests at every stage of their interaction with financial institutions.
These principles not only aim to foster trust and transparency, but also to empower consumers, providing them with the knowledge and tools needed to make informed decisions. From ensuring equitable treatment and transparent communication to protecting against fraud and handling complaints effectively, Thistle Initiatives’ Rohan Chakraborty will explore some key takeaways from the comprehensive framework that underpins the ethical and professional conduct expected of PSPs in Saudi Arabia.
Beyond the general instruction to treat consumers ‘equitably, honestly and fairly’ across their business relationship, PSPs are expected to maintain a focus that accounts for vulnerable groups such as low-income or differently-abled individuals, which means that all product offerings must be developed with consumer protection in mind. It will also reflect in the service all consumers receive, driven by strong professional ethics that prioritize the financial interests of the consumer – for example, PSPs need to devote the suitable human and financial resources (appropriate to the nature and size of the Firm) to ensure that help centres and communication channels are available for consumers in need.
SAMA emphasise the importance of clear and accurate information – critical details relating to a product/service should be transparent, such as the terms entailed with product use, the associated risks of such a product/service alongside its benefits, and openness about what terminating the business relationship would mean for the consumer. In the interest of preserving the consumer’s right of informed choice, the PSP is obliged to elaborate on alternative products and services for a balanced decision. This includes allowing consumers the opportunity to compare the best services and their providers even if outside of the Firm, which in turn will promote innovative and high-quality products and services in Saudi Arabia.
The protection of consumer assets is of crucial value to ensuring a PSP’s compliance with the laws and regulations in Saudi Arabia – it is essential that robust controls for data protection are in place at any PSP, upholding data privacy and confidentiality of information, as well as equally robust systems in place to detect and prevent fraud.
As the previous points have shown, clarity is key, and it must be clear to consumers that there is a mechanism in place to submit complaints. Supported through policy and procedure, the PSP must establish the facilities necessary to ensure the timely and fair resolution of the consumer’s complaint, as well as making available all details to be used by the consumer for following up on a complaint (e.g. free-of-charge business phone numbers in the Kingdom for reporting complaints). Equally, the PSP must ensure that they have published an internal policy on conflict of interests, allowing any transactions which are likely to be a source of conflict of interest between the PSP and another party to be reported immediately to SAMA or the relevant responsible authority.
Though a PSP may outsource a service provider to handle certain consumer relationships, this does not remove the responsibility that the PSP has to ensure that all parties involved are complying with SAMA’s Principles and Rules. If the PSP’s outsourced service provider does not meet the compliance requirements as instructed by SAMA under Saudi Arabia’s applicable laws, regulations and instructions, the PSP will also be held accountable for not serving consumer’s interests when regulatory and/or legal action is undertaken in response. Essentially, anything that goes on underneath the umbrella of a PSP’s license is their responsibility to ensure that it is operating in accordance with SAMAs principles.
As this article has explored, SAMA has and will continue to make the payment services space a secure environment that protects consumers, and as a result will expect firms across the Kingdom to develop robust policies, procedures, systems and controls to support that vision.
At Thistle Initiatives having worked with over 250 payment and e-money firms across the world, we offer compliance support to ensure that your firm will be able to continue to meet your compliance obligations on an ongoing basis in a changing payments landscape, from technical advice to a strong compliance document suite.
Schedule a complimentary consultation with our specialist Payment Services team today. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.