BNPL has grown fast in the GCC, particularly in the UAE and Saudi Arabia, where digital payment adoption is high and consumer demand for flexible financing continues to rise.
In the UAE, the BNPL market is projected to reach $2.84 billion in 2025, up 15.6% from last year. Saudi Arabia is close behind, with a projected 13.5% year-over-year increase and a total market value of $1.48 billion.
Across the region, BNPL providers likeTabby, Tamara, and Postpay are expanding through partnerships with platforms like Noon and Amazon, driving more volume through embedded checkout options.
But with this growth comes new risks for businesses. Missed payments and thin credit assessments are becoming more common, especially in markets where regulation is still evolving and affordability checks are inconsistent.
As BNPL continues to scale, providers are looking for ways to reduce risk, improve repayment rates, and make smarter, real-time decisions about who to lend to.
That’s where Open Banking becomes relevant – not as a replacement for BNPL, but as a way to strengthen it
BNPL’s appeal lies in how easy it is to offer and use. But the same simplicity is now surfacing risks that the sector is still learning how to manage.
Most BNPL approvals are based on shallow data: identity checks, basic income declarations, or simple transaction histories. Without access to real-time financial information, providers risk approving purchases that customers can’t realistically afford.
In Saudi Arabia, 77% of BNPL users say they rely on it for essentials like groceries and bills. This reflects growing demand, but it also signals overextension and growing repayment risk. As consumers take on multiple BNPL plans at once, repayment dates overlap, and many lose track. The result is growing financial strain for users, and rising default risks for merchants and providers.
In many parts of the GCC, credit systems are either limited or unevenly adopted. There’s no single standard for assessing consumer creditworthiness across providers, and affordability checks vary widely. This makes it harder for BNPL firms to scale responsibly, and puts pressure on businesses who offer these services without a clear view of customer risk.
Traditional BNPL models rely on limited information. Open Banking changes that by providing access to live financial data, with the customer’s consent, directly from their bank accounts. This unlocks three practical advantages:
With access to real-time account balances, income patterns, and recent spending, BNPL providers can assess whether a customer can realistically afford the payment plan before extending credit. This reduces default rates and ensures businesses get paid on time.
Instead of relying on uploaded documents or manual verification, Open Banking allows providers to instantly confirm a customer’s identity and account ownership. That means fewer fake applications, fewer chargebacks, and less risk for merchants.
Open Banking also allows for more flexible repayment design. By understanding how much disposable income a customer has – or when they receive their salary – providers can offer installment dates or amounts that align with reality, not assumptions. This makes repayment easier and reduces missed dates.
Several BNPL providers globally are already using Open Banking to strengthen their credit models and reduce risk.
- Klarna: Through Open Banking integrations, Klarna pulls real-time account data to tailor credit limits to each user’s financial capacity, rather than using flat criteria. This helps reduce over-lending and supports long-term repayment success.
- Alma: Alma uses Open Banking to assess affordability before approving payments, giving small businesses more control over their cash flow. Merchants also benefit, since approvals are more likely to result in successful, on-time repayments.
For providers in the MENA region, these examples offer a glimpse into how Open Banking can shift BNPL from reactive risk management to more proactive and personalised financial services.
BNPL has momentum, but momentum alone won’t solve its biggest risks: defaults, repayment gaps, and uneven credit assessments.
Open Banking gives providers the data infrastructure to improve affordability checks, tailor repayment plans, and reduce fraud.
And it does all of this without relying on outdated documents or guesswork.
For any business building, offering or relying on BNPL, now is the time to integrate smarter tools into the system.
We work with fintechs, platforms and financial institutions to do exactly that. Let’s talk about how we can help you apply it to your use case.
