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RIYADH: The pandemic-induced lockdowns and safety measures accelerated the global shift to online payment and other financial services.

Countries like Saudi Arabia and the UAE have also witnessed a rapid increase in online short-term credit options such as the buy now, pay later services in the aftermath of the pandemic such as the Saudi-based Tamara and UAE’s Spotii, Tabby, and Postpay.

BNPL companies typically allow shoppers to pay for goods they purchase in installments over several weeks or months.

The COVID-19 pandemic came as a blessing in disguise for many online companies who reaped huge profits through e-commerce across the board, more specifically among younger consumers.

Early adopters

“Millennials and Generation Z are the primary early adopters of BNPL. But with all new trends, a drip down effect will spread adoption to mainstream across generations soon after,” says Tarek Barakat, marketing and e-commerce director at Beside Group, a regional retailer for brands such as Diesel, Fred Perry, Scotch & Soda among others.

A tech-savvy young population is the main target for BNPL platforms latest data revealed.

“Our rapid growth demonstrates that Millennials and Gen Z, who make up 75 percent of our users, are increasingly turning away from traditional services and looking for something which more closely fits with their financial needs,” according to Abdulmajeed Alsukhan, co-founder and chief executive of Tamara.

Online shopping

Today 80 percent of young Arabs shop frequently online, compared to 71 percent in 2019. In addition, 50 percent of those aged 18-24 in the Middle East and North Africa prefers online shopping since the COVID-19 outbreak.

As a result, the sector reached a whopping $22 billion by the end of 2020, according to a Wamda report.

“These generations (in the Gulf Cooperation Council) look at BNPL as a convenient way to purchase expensive items. They don’t have to pay in one go and touch their savings,” said Amna Mohamad, a Dubai-based consultant in her 20s who uses BNPL, in an interview with Arab News.


A big driver for such payment facilities was the consumers’ need to manage cash and expenses, especially during 2020 when the region faced socioeconomic ramifications due to COVID-caused lockdowns, Amal Alameh, the head of consulting MEA and India at Euromonitor, a strategic research and marketing firm, told Arab News.

GCC companies such as Beside Group are looking into BNLP solutions.

“It was important for us to ensure that no interest is being charged to consumers. While we are still in the testing phase, it is clear that BNPL solutions are quickly becoming a mainstream payment instrument in the market,” Barakat said.


Meanwhile, BNPL players are partnering up with electronics retailers, beauty and fashion as well as homewares and furniture, according to Euromonitor. These brands include IKEA, ACE, Bloomingdale’s, and H&M, as well as Shopkees and Styli, two e-commerce platforms, among many others.

Turki bin Zarah, co-founder and chief commercial officer of Tamara, or CCO, said: “Our first 16 months of operations have seen Tamara go from strength to strength at a growth rate of more than 100 times in 2021.”


Tamara’s CCO said the platform raised $116 million of funding, with a Series A round of $110 million led by, a leading payments provider, and UK-based fintech which recently closed its own $1 billion Series D round at a $40 billion valuation.

In May, Australia’s second-biggest BNPL player Zip said it was buying the rest of the shares in Spotii that it did not already own for $16 million, according to Reuters.

In August, Tabby announced that it had raised $50 million in an equity round that valued the company at $300 million. 

Abdulmajeed Alsukhan

According to information provided by Euromonitor, Tabby has over 1 million users in the UAE and Saudi Arabia. Tamara has processed SR1 billion of merchant sales across over 2,000 merchants in 2021.

As many as 2 million customers have joined Tamara so far, around 75 percent of which are Millennials and Gen Z.

In the Gulf region, BNPL companies present themselves as an alternative to cash on delivery or credit cards.

“The concept is simple. Customers check out as normal, then spread their purchase across three interest-free payments instead of paying all at once. Tamara makes this fast and easy. There’s no need to pre-qualify, no interest, and no hidden fees,” said Alsukhan.

“I generally try using BNPL for big-ticket items like a designer bag. I try, however, not to use it regularly to avoid getting into debt. As an example, I won’t allow several payments to overlap. Everyone I know uses that rule,” added Mohamad.


As the sector gains traction, the sector should be more regulated, considering the credit risk it entails, online payment expert Bassam Tueni explained in an interview with Arab News

Given that BNPL firms generally make money off merchant commissions and late fees, they have so far avoided falling under strict credit laws.

“BNPL platforms may not require a credit check or credit score, yet any consumer loan will be regarded as a line of credit. It is not exactly a safe bet,” warned Tueni.

The sector is now getting more scrutiny from regional central banks.

For example, this February, the Central Bank of Bahrain issued amendments to facilitate the entry of new financial innovative companies such as BNPL into the market.

Last October, the Saudi Central Bank decided that BNPL businesses in Saudi Arabia required a permit to operate.

Regulations will not hamper the GCC population’s use of BNPL. BNPL payments in Saudi Arabia are expected to grow by 81.2 percent annually, to reach $636.7 million in 2022, according to a report by

“The BNPL gross merchandise value in the country will increase from $351.3 million in 2021 to reach $5,299.3 billion by 2028,” the report added.

A prolonged pandemic combined with a youthful population makes BNPL more attractive in the long run in the GCC. That will nonetheless depend on how it fares compared to credit cards.

“There is a big gap in the market that is filled by BNLP. Developments in this space will depend on whether banks and payment service providers will partner with such platforms. We will either see new payment products coming up in the next few years or chipping away of credit card volumes from total purchases,” Alameh added.

Noting that the news was copied from another site and all rights reserved to the original source.

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