Qatar Embraces BNPL: Insights from Approved Startups

Qatar - Qatar's financial landscape is undergoing a digital revolution, thanks to initiatives led by the Qatar Central Bank (QCB). One such initiative is the regulatory sandbox program, offering a safe space for fintech startups to test their operations. Recently, QCB approved the first cohort of startups for the program, including Spendwisor Inc, Qaiver FinTech, PayLater, HSAB for Payment Solutions, and Mihuru.

The regulatory sandbox serves as a vital testing ground for fintech innovation in Qatar. Startups like PayLater and Qaiver have praised the program for its support in shaping the payment landscape. Mohammed Al Delaimi, CEO of PayLater, expressed excitement, highlighting their commitment to security and consumer protection. He stated, "The access to QCB’s sandbox to start testing BNPL products in the market helps in setting up all processes and integrations with stakeholders. It will further allow us to test with genuine merchants and customers. Based on local reports and surveys, 70% of customers are intending to use BNPL products in the coming 12 months. So, the market is ready to adopt this new instrument as it will help regulate customers’ finances.”

These startups represent a diverse range of fintech solutions, from payment platforms to financial empowerment tools. Allan Villages, Founder & CEO of Qaiver expressed his enthusiasm, stating, “This milestone for the country and for the BNPL providers like us represents a new era of financial inclusion for underrepresented populations in the financial services. BNPL has gained popularity in the region long before its introduction to Qatar, but this approval enables us to go to market this same year under QCB's supervision and puts us in the global startup ecosystem scene. I see ourselves scaling inside and outside Qatar, and exploring a M&A exit in the next 5-7 years. For us we were ready way before the BNPL regulation came out but our clients were concerned about being able to conduct the activities without the QCB approval, so at the end the timing was correct to apply and we are ready to start testing under the sandbox guidelines.”

Despite regulatory strides, concerns linger over unlicensed foreign BNPL companies currently operating in Qatar which is raising questions about fairness and regulatory compliance, necessitating stricter enforcement measures to uphold industry standards.

“This puts big risks on both customers and merchants as those unlicensed companies don’t have any presence in Qatar. It will route all transactions outside Qatar which will infringe data privacy and sovereignty. Furthermore, it gives unfair advantage to access the market without the commitments and compliance to local regulations.” Mohammed Al Delaimi further added.

The approval process for BNPL companies under Qatar Central Bank's (QCB) regulatory sandbox is rigorous and detailed, ensuring the safety and reliability of financial services. Fintech startups must submit comprehensive applications detailing their business models, undergo assessments of their security systems, consumer protection measures, and operational and financial stability. Throughout the process, they engage in ongoing dialogue with QCB, demonstrating transparency, accountability, and compliance. Successful navigation of this process grants the company a possible entry into the sandbox for testing.

There are therefore concerns about fairness, particularly regarding the operation of unlicensed foreign BNPL companies in Qatar. While local startups undergo rigorous scrutiny and adhere to strict regulatory requirements to gain approval for operating within the regulatory sandbox, foreign companies are able to offer similar services without undergoing the same level of scrutiny. This disparity not only raises questions about regulatory compliance and consumer protection but also creates an uneven playing field for local fintech startups. Addressing this issue is crucial to ensure fairness and integrity within Qatar's fintech ecosystem, emphasizing the need for stricter enforcement measures to uphold industry standards and protect the interests of all stakeholders.

BNPL, or Buy Now Pay Later, presents a significant opportunity for Qatar's financial landscape. With the global market for BNPL solutions projected to reach $960 billion by 2026, embracing BNPL could drive economic expansion and enhance consumer spending habits in Qatar. As consumers increasingly seek flexible payment options, BNPL offers a convenient and accessible solution that aligns with Qatar's vision for a modern and inclusive financial ecosystem.

As Qatar embraces fintech, collaboration between stakeholders is key. QCB's evolving regulatory framework aims to address emerging challenges while pushing for innovation. 

In summary, Qatar's fintech journey is characterized by innovation, regulatory support, and collaboration. With the regulatory sandbox paving the way for startups like PayLater, Qaiver and others, with ongoing efforts to address challenges and promote fairness, Qatar is well-positioned to lead the fintech revolution in the region, through ongoing dialogue and collaboration.

Follow us for more:

Innovation Cafe is a dynamic platform at the forefront of innovation, entrepreneurship, and collaboration in Qatar. We serve as a hub where startups, entrepreneurs, professionals, and innovators come together to exchange ideas, share knowledge, and drive positive change. Through our diverse range of programs, events, and initiatives, we empower individuals and organizations to navigate challenges, and make an impact.