Following on from last week’s introductory overview of the new Saudi payments law and its related services, part two throws the spotlight on the main obligations of the system’s operators and issues related to rule violations.
In recent years, the Kingdom’s legal focus has been on data due to the significant role it plays in the payments sector.
The new law has made clear the responsibilities of payment system operators and their service providers, including the adoption of fair and appropriate mechanisms that meet sector standards, the need to separate funds paid to operators and service providers by members, customers, and consumers, and the maintenance of personal information and data confidentiality.
The regulations are based on Saudi Central Bank criteria surrounding the size, value, and nature of the operations. Some of the most important rules relate to when a payment order becomes final, procedures for ensuring protection, validity, and clearing arrangements in instances where the important payment systems operator fails, and the enforcement of operator guarantees.
Penalties for breaching the provisions of the law include the issue of warnings, temporary license suspensions, fines of up to SR25 million ($6.6 million), and the cancellation of permits.
The Central Bank is the authority responsible for looking into violations and any interested party has the right to appeal decisions within 60 days of notification.
Finally, it is important to highlight that the imposition of any penalty on a legal entity would not exempt a member of the board of directors, manager, or official representative of it from responsibility or punishment if a crime took place with their consent, or due to their negligence or ignorance.
• Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif
