Case Study: Tamara and the Buy Now, Pay Later (BNPL) Model
- Aman Zaid
- Apr 17
- 4 min read
Updated: May 14
Several studies predict that the Buy Now, Pay Later (BNPL) market in Saudi Arabia will grow to $548.5 million by 2033.
Overview of the BNPL market - Buy now, pay later or deferred payment in Saudi Arabia and its impact on the economy
The "buy now, pay later" (BNPL) market has emerged globally in parallel with technological advancements, with many companies contributing to providing the easiest ways to achieve a superior customer experience. Among the Arab countries that prioritize the technology and artificial intelligence sector is Saudi Arabia, which has contributed to the multiplicity of applications that seek customer satisfaction. In recent years, Tamara has emerged as the Kingdom's first billionaire or unicorn financial technology company.
The size of the "buy now, pay later" (BNPL) market in Saudi Arabia reached US$89.1 million in 2024. The market is expected to reach US$548.5 million by 2033, at a compound annual growth rate (CAGR) of 22.4% during the period 2025-2033. This growth is driven by consumers' growing preference for flexible payment options, with 77% of Saudi consumers now using "buy now, pay later" services for their basic needs, in line with Islamic finance principles and meeting their evolving shopping needs.
How did Tamara become a leader in the Saudi BNPL market?
"Making payments easier than ever"
Tamara, the shopping and payments platform, was founded in 2020 by entrepreneurs Abdulmajeed Al-Saikhan, Turki Bin Zarah, and Abdulmohsen Al-Babtain. It focuses on providing a seamless experience for merchants and customers by revolutionizing shopping, payments, and banking services, and offering fair and transparent financial solutions. Today, Tamara serves over six million customers and 15,000 partner merchants, including Shein, Jarir, Noon, IKEA, and Farfetch. The company is also backed by Sanabil Investments, a wholly owned subsidiary of the Public Investment Fund, and the National Commercial Bank of Saudi Arabia, in addition to numerous local small and medium-sized enterprises. Today, over a third of Tamara users shop from the app itself, providing a significantly higher return on advertising expenditure for Tamara's partner stores.
Tamara was ranked seventh in Forbes' Top 30 Fintech Companies of 2023. A white paper on Tamara in the GCC predicts that the value of "buy now, pay later" (BNPL) services will reach $960 billion by 2028, growing at a compound annual growth rate (CAGR) of 14%. Alternative payment methods (APMs) dominate global business-to-consumer (B2C) payments.
“Saudi Arabia and the GCC deserve a place on the global fintech scene,” CEO Abdulmajeed Al-Saikhan told TechCrunch. “Tamara was founded by local entrepreneurs, supported by a supportive local ecosystem and market regulator.” Tamara is the first Saudi company to receive a license to offer indirect lending solutions from the Saudi Arabian Monetary Authority (SAMA) and has graduated from its first regulatory sandbox, with over 500 employees across its headquarters in Riyadh and other cities, including Dubai, Berlin, and more.
How does your Buy Now, Pay Later (BNPL) model work?
Tamara offers numerous offers and discounts at customers' favorite stores, gaining their satisfaction and loyalty. Its "Buy Now, Pay Later" (BNPL) model works as follows:
Easy and secure registration.
Browse 26,000+ stores.
Split the bill into 6 or more installments based on customer preference.
Benefit from exclusive discounts with the Farah Offers program!
Geographic expansion across the GCC.
Ensuring no delays and compliance with Islamic Sharia law.
What challenges did Tamara face, and how did digital transformation enhance the Tamara experience?
Tamara faced challenges in the untapped business-to-business (BNPL) mortgage market, cybersecurity risks, regulatory scrutiny, and the need to adapt to evolving consumer demands. However, it responded digitally intelligently as follows:
Strategic Growth: Since its founding in late 2020, Tamara has experienced rapid growth. According to Reuters, it has acquired over 10 million users and partnered with over 30,000 merchants in the GCC.
Regional Solutions: Tamara has partnered with Paymob, a payment gateway provider, to enable small and medium-sized businesses in the Middle East to offer business-to-business (BNPL) financing services to their customers. This allows customers to pay in four installments with no fees or interest, using Paymob's payment gateway, which serves 250,000 merchants. The partnership will initially focus on Saudi Arabia and the UAE, with plans to expand further across the region.
Customer-centric innovation: Tamar adopts a voice-of-the-customer approach to gain customer loyalty, from interactive content and the flow of creative ideas on digital platforms to secure, Sharia-compliant payment methods. According to a FinTech Futures report, the use of buy now, pay later (BNPL) services is increasing among younger demographics, particularly millennials and Generation Z, in Saudi Arabia. These tech-savvy consumers prefer alternative payment methods that offer flexibility and convenience compared to traditional credit options.
Tamara's Role in Saudi Vision 2030
As part of Saudi Vision 2030, the Saudi Arabian Monetary Authority (SAMA) acknowledged in its first annual report for 2022 the importance of financial technology within the Financial Sector Development Program, aiming to achieve global competitiveness through technological innovation and transform Riyadh into a leading technology hub. The agency also aims to increase the number of financial technology companies to 525 in Saudi Arabia, increase the percentage of cashless transactions to 70%, increase venture capital investments to SAR 2.6 billion, and raise the financial technology sector's contribution to the GDP to SAR 4.5 billion by 2025, while increasing the total value of goods sold through the "buy now, pay later" (BNPL) system. Crowdfunding loans for disbursed debt have also increased.
In this regard, the Saudi Arabian Monetary Authority (SAMA) announced that it has granted the company approval to offer consumer financing and buy-now-pay-later services, stressing that this step reflects the bank's commitment to supporting the growth of the financial sector, bringing the total number of licensed lending companies in the Kingdom to 65. This approval aligns with the goals of Saudi Vision 2030 to promote the digital economy, expand financial inclusion as outlined in the country's Financial Sector Development Program, and increase the share of non-cash transactions.
