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Central Bank of Kuwait Overhauls Fintech Regulations

The Central Bank of Kuwait has introduced new regulations governing electronic payment, settlement, and storage of funds, as well as Buy Now Pay Later services. This move comes as part of efforts to keep pace with the rapidly evolving fintech landscape.

Key Changes Under the New Regulations

According to Resolution No. 45/471/2023, the previous regulations under Resolution No. 44/430 of 2018 have been repealed. The new rules are set to affect various businesses offering e-payment and fintech services, including:

  • Banks
  • E-wallet providers
  • Online retailers
  • E-commerce platforms

Exclusions

The scope of the regulations is yet to be tested, but certain exclusions have been made for conventional banking and transactional activities.

New Regulations in Detail

Key changes under the new regulations include:

  • The introduction of licensable activities such as:
    • E-payment
    • E-money
    • E-payment service operations
    • Buy Now Pay Later services
  • Licensing requirements and operational restrictions now depend on the size of the service provider and the nature of its activities.
  • Regulations have been put in place governing Buy Now Pay Later services, opening up opportunities for Kuwait-based businesses to offer products on credit terms to consumers.

Relaxation of Restrictions

The previous regulations had restricted independently licensed e-payment service providers to large shareholding companies with lending or currency exchange licenses. However, this restriction has now been repealed, giving start-ups more flexibility to obtain the necessary licenses and operate independently.

Strengthened Regulatory Framework

Additionally, the new regulations have strengthened the regulatory framework in areas such as:

  • Corporate governance
  • Risk management
  • Anti-money laundering
  • Cyber security
  • Business continuity
  • Consumer protection
  • Data privacy

Seeking Guidance

Businesses seeking guidance on how these regulations apply to their specific operations can contact Al Tamimi & Company’s experts Omar Handoush or Yousef Alshereedah for assistance.