Legal Regulation of Buy Now, Pay Later (BNPL) Companies

Tawakol, Fady

doi:10.21608/ijdjl.2024.315825.1257

Legal Regulation of Buy Now, Pay Later (BNPL) Companies

Document Type : Original Article

Author

Fady Tawakol

Associate Professor of Commercial Law Zayed University Cape Breton University Canadian International College: Cairo, New Cairo, EG

10.21608/ijdjl.2024.315825.1257

Abstract

The Buy Now Pay Later (BNPL) system is considered one of the fundamental aspects of trade and commercial exchange, as it allows the parties involved to conduct transactions without needing to pay the full amount at the time of the deal or the completion of the purchase.

The activities of BNPL companies provide multiple benefits to both producers and consumers. BNPL helps to increase the demand for consumer goods they produce, thereby improving production efficiency and profitability, which, in turn, enhances their standard of living and ability to purchase products they cannot afford. At the national economy level, the operation of deferred payment companies helps to increase domestic demand, leading to increased investment, employment, and economic growth. It also promotes better resource utilisation by the household sector and improves planning and savings capabilities.

In this paper, we try to analyse the legal regulations governing the activities of BNPL companies at the Dubai International Financial Centre, the United Arab Emirates, the Arab Republic of Egypt, and the Kingdom of Saudi Arabia. The study is divided into two chapters. In the first chapter, we explain the nature of BNPL companies by defining the BNPL system at the Dubai International Financial Centre, the United Arab Emirates, the Arab Republic of Egypt, and the Kingdom of Saudi Arabia. We found that each country has a different name for this activity. We also outline the advantages and disadvantages of the deferred payment system and distinguish the deferred payment contract from other similar contracts.

In the second chapter, we discuss the legal framework for practising BNPL activities by clarifying the licencing procedures for engaging in BNPL activities.

Keywords