Buy now, pay later in the UAE

Buy now, pay later (BNPL) lets you split a purchase into instalments. In the UAE the Central Bank regulates it as Short-Term Credit: credit for up to 12 months to buy specific goods or services, with no interest, no collateral and no security deposit. One provider can lend you at most AED 20,000 or three months’ verified net income, whichever is lower.

Who can offer BNPL

Short-Term Credit may be offered by Restricted Licence Finance Companies licensed by the Central Bank, or by agents that partner with a licensed finance company or bank. Offering it without a licence can be penalised. Before you sign up, check that the app names the licensed company behind it.

The rules in brief

These caps apply to restricted-licence finance companies and their agents.

Cap on BNPL fees

30%

Total fees on a Short-Term Credit, including late payment fees, must not exceed 30% of the original amount, so a borrower never repays more than 130% of the credit, even if it is restructured or rolled over.

Because fees are capped at 30%, you never repay more than 130% of the amount you borrowed, even if the plan is restructured or rolled over.

Worked example

A purchase of AED 2,000 paid in instalments

The purchase price is an illustration.

1. Most the provider can charge in fees, late fees included: 30% × AED 2,000 = AED 600.
2. Most you can ever repay: AED 2,000 + AED 600 = AED 2,600.

With a provider covered by these rules, this purchase cannot cost more than AED 2,600 in total.

What follows a missed instalment, from late fees to your credit report and the courts, is covered in missing a BNPL payment.

BNPL and your credit report

Providers must report your BNPL credit to the Etihad Credit Bureau. Under the bureau’s current score model, BNPL does not change your credit score, but your contracts, balances and remaining instalments appear on your credit report, where any lender reviewing it can see them. Read more in our guides to BNPL and your AECB credit score and checking your AECB report.