BNPL culture on the rise among GCC millennials, Gen Z


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

Countries like Saudi Arabia and the United Arab Emirates have also seen a rapid increase in online short-term credit options such as buy-it-now and pay-later services in the aftermath of the pandemic, such as the Saudi Arabian Company Tamara and Spotii, Tabby and Postpay from the United Arab Emirates. .

BNPL companies generally allow buyers to pay for the goods they buy in installments over several weeks or months.

The COVID-19 pandemic has been a blessing in disguise for many online businesses that have made huge profits from e-commerce across the board, especially among younger consumers.

Early adopters

“Millennials and Generation Z are early adopters of BNPL. But with all new trends, there will be a trickle-down effect that will spread mainstream adoption soon after,” says Tarek Barakat, Director of Marketing and E-Commerce at Beside Group, a regional retailer for brands such as Diesel, Fred Perry, Scotch & Soda. among others.

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

“Our rapid growth demonstrates that millennials and Gen Z, who make up 75% of our users, are increasingly turning away from traditional services and looking for something that more closely matches their financial needs,” said Abdulmajeed Alsukhan, co -founder and managing director of Tamara.

Shopping online

Today, 80% of young Arabs shop online frequently, up from 71% in 2019. Additionally, 50% of 18-24 year olds in the Middle East and North Africa prefer online shopping since the COVID outbreak. -19.

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

“These generations (in the Gulf Cooperation Council) see BNPL as a convenient way to buy big-ticket items. They don’t have to pay all at once and touch their savings,” said Amna Mohamad, a Dubai-based consultant in her twenties who uses BNPL, in an interview with Arab News.

To strenghten

A key driver of these payment facilities was consumers’ need to manage their cash and spending, especially in 2020 when the region faced socio-economic ramifications due to lockdowns caused by COVID, Amal Alameh, head of MEA and India consulting at Euromonitor, a strategic research and marketing firm, said Arab News.

GCC companies such as Beside Group are exploring BNLP solutions.

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


Meanwhile, BNPL players are linking up with electronics, beauty and fashion retailers 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 operation has seen Tamara strengthen at a growth rate of over 100x in 2021.”


Tamara’s CCO says the platform has raised $116m in funding, with a $110m Series A led by leading payment provider and a UK-based fintech. Uni which recently closed its own $1 billion Series D at a $40 billion valuation. .

In May, Australia’s second-biggest BNPL player Zip said he was buying the rest of the Spotii shares he didn’t already own for $16 million, according to Reuters.

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

Abdulmajeed Alsukhan

According to information provided by Euromonitor, Tabby has more than one million users in the United Arab Emirates and Saudi Arabia. Tamara processed SR1 billion in merchant sales from over 2,000 merchants in 2021.

No less than 2 million customers have joined Tamara so far, of which around 75% 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 pay for their purchases normally, then spread their purchase over three interest-free payments instead of paying all at once. Tamara makes it quick and easy. There is no need to pre-qualify, no interest and no hidden fees,” Alsukhan said.

“I usually try to use BNPL for big ticket items like a designer bag. I try not to use it regularly though to avoid getting into debt. For example, I won’t allow multiple payments to overlap. Everyone I know uses this rule,” Mohamad added.


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

Since BNPL firms typically make money from merchant fees and late fees, they have so far avoided falling under strict credit laws.

“BPL’s platforms may not require a credit check or credit score, but any consumer loan will be considered a line of credit. It’s not exactly a safe bet,” Tueni warned.

The sector is now coming under greater scrutiny from regional central banks.

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

Last October, the Saudi Central Bank ruled that BNPL businesses in Saudi Arabia needed a license to operate.

The regulations will not impede the use of BNPL by the GCC population. BNPL payments in Saudi Arabia are expected to grow 81.2% annually, reaching $636.7 million in 2022, according to a report by

“The gross value of BNPL’s goods 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 young population makes the BNPL more attractive in the GCC in the long term. However, this will depend on its price compared to credit cards.

“There is a big void in the market which is being filled by BNLP. Developments in this space will depend on whether banks and payment service providers are willing to partner with these platforms. We will either see new payment products appear in the next few years or reduce credit card volumes of total purchases,” Alameh added.

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