07Oct

Buy Now, Pay Later Is Growing in Saudi Arabia: Are Companies’ Sales Turning Into Hard-to-Collect Debts?

As digital transformation accelerates across the Saudi market, traditional payment methods are no longer the only option available to customers and businesses. Buy Now, Pay Later (BNPL) has become an increasingly important part of the modern financial landscape, with digital solutions allowing customers to receive goods or services and pay for them later according to agreed terms.

This development creates significant opportunities for businesses. Offering more flexible payment options can help increase sales, improve customer experience, and reach new segments of consumers.

But there is another side that deserves equal attention:

What happens when sales turn into receivables that do not enter the company’s accounts on time?

This is where effective receivables management and debt collection become essential.

For Saudi companies, the question is no longer simply:

How can we sell more?

It has also become:

How can we increase sales without creating a dangerous gap in cash flow?

Buy Now, Pay Later: From an Additional Option to an Important Part of the Financial Landscape

BNPL has become increasingly present in the Saudi market alongside the growth of digital financial services, e-commerce, and changing consumer behavior.

The Saudi Central Bank has established rules governing BNPL companies, with the aim of regulating the activity, setting licensing and compliance requirements, protecting customers, and reducing credit-related risks.

The sector also continued to expand during 2026. In August 2026, the Saudi Central Bank announced the licensing of Jil Buy Now, Pay Later Company, bringing the total number of licensed finance companies at the time to 78.

Earlier, in July 2026, the Saudi Central Bank announced the licensing of another company to conduct BNPL activities.

These developments reflect continued interest in developing the financing and financial services sector in the Kingdom.

For business owners, however, the growth of BNPL is not merely an opportunity to increase sales. It also requires more careful management of cash flow and receivables.

Why Can Increasing Sales Sometimes Become a Problem?

The idea may initially seem contradictory.

How can higher sales be a problem?

The answer lies in the difference between recorded sales and the actual cash available in the company’s bank account.

Suppose a company sells products or provides services worth SAR 1 million during a certain period, but a significant portion of that amount will not be collected until 30, 60, or 90 days later.

On paper, the company has achieved strong sales.

In reality, however, it may still need to pay:

Employee salaries.
Rent.
Operating expenses.
Supplier payments.
Marketing expenses.
Shipping costs.
Taxes and other obligations.
Expansion costs.

If the money does not come in as expected, the company may face a dangerous contradiction:

High sales, but limited liquidity.

This is where accounts receivable become a serious concern.

Accounts Receivable: The Number That May Hide a Major Problem

Accounts receivable are simply the amounts a company expects to collect from its customers.

Having accounts receivable is not inherently a problem. Most businesses that offer credit terms have outstanding customer balances.

The problem begins when receivables stop functioning as a normal sales tool and instead become accumulated amounts that are increasingly difficult to collect.

A company may have dozens or hundreds of customers with outstanding balances.

Each customer may appear insignificant individually.

But when all these amounts are combined, the picture can be very different.

For example:

One customer owes SAR 20,000.
Another owes SAR 35,000.
A third owes SAR 80,000.
A fourth owes SAR 150,000.
Dozens of other customers owe smaller amounts.

Eventually, the total outstanding debt may reach millions of Saudi riyals.

The problem, therefore, is not necessarily the value of a single invoice.

The real problem is the accumulation of receivables.

The Real Risk Is Not BNPL — It Is Poor Receivables Management

One important point should be clarified:

BNPL is not necessarily a risk for businesses.

It can be an important commercial tool that helps increase sales and improve customer experience.

The problem arises when a company offers deferred payment terms without having a strong credit and collection management system.

A company that allows customers to pay later should know in advance:

Who is the customer?
What level of business is appropriate for that customer?
What are the payment terms?
What is the approved credit limit?
What documents support the transaction?
When should collection follow-up begin?
What happens if the customer fails to pay?
When should the outstanding balance be escalated to more serious collection procedures?

Without clear answers to these questions, deferred payment can become an unmanaged financial risk.

Why Do Some Companies Take Too Long to Discover Their Debt Problems?

One reason is that management may focus more heavily on sales indicators than on collection performance.

A company may celebrate increased revenue while failing to monitor the aging of its receivables with the same level of attention.

This makes it important to classify receivables according to how long they have remained outstanding.

Current Receivables

Amounts that are not yet due.

These are not overdue debts, but they still require monitoring.

Short-Term Overdue Receivables

Amounts that have recently passed their due dates.

These require reminders and prompt follow-up.

Long-Overdue Receivables

Amounts that have remained unpaid for a longer period.

These require more structured collection measures.

Old and Delinquent Debts

These require a serious assessment of the most appropriate collection strategy.

The longer a company waits to address outstanding debt, the more complicated the collection process may become.

The Customer Who Says: “I’ll Pay Next Week”

One of the most common scenarios companies face is:

“I’ll pay next week.”

Then the following week arrives.

The customer says:

“Please send me the invoice again.”

Then:

“The accountant responsible is not available.”

Then:

“The payment will be processed within a few days.”

And more weeks pass.

The problem is not necessarily the promise itself.

The problem is the absence of a system for verifying whether the promise has actually been fulfilled.

Companies should therefore avoid relying solely on verbal promises.

If a payment date is agreed upon, it should be documented and monitored.

If the customer fails to meet the agreed date, the case should move to the next stage of follow-up according to the company’s collection policy.

What Should a Company Do When a Customer Is Late?

The first step is not to wait too long.

Once the payment becomes due and the amount has not been received, the company should review the account and ensure that all relevant documents are complete.

The company should then communicate with the customer professionally.

The communication should be clear:

What is the outstanding amount?
Which invoice is involved?
When was the payment due?
What is the reason for the delay?
When will payment be made?

If the customer is facing a temporary issue and has a genuine intention to pay, the company may consider an appropriate solution depending on the circumstances.

However, if the delay continues without a clear justification, the company should have an organized escalation process.

Do Not Let the Sales Department Decide Credit Limits Alone

One mistake some companies may make is focusing primarily on closing the sale.

The salesperson wants to close the deal.

Management wants higher revenue.

The customer wants longer payment terms.

As a result, the company may offer unsuitable credit terms simply to complete the transaction.

But management should ask:

Is this transaction truly profitable if the amount is not collected on time?

A sale that is not collected can turn from an opportunity into a financial burden.

There must therefore be a balance between sales objectives and financial risk management.

Deferred Payment Requires a Clear Policy

Every company that allows customers to pay later should have a clear policy.

Such a policy may include:

1. Defining Payment Terms

The customer should know from the beginning when and how payment is expected.

2. Setting Credit Limits

Not every customer should necessarily receive the same credit limit.

3. Defining the Credit Period

Will payment be due within:

15 days?
30 days?
60 days?
More?

The payment period should be clearly defined.

4. Documenting the Transaction

Contracts, invoices, purchase orders, delivery documents, and other supporting records may be important depending on the nature of the transaction.

5. Establishing a Follow-Up System

The company should not wait until the payment due date before beginning the collection process.

6. Establishing a Procedure for Late Payments

Management should know in advance what action will be taken if the customer fails to pay.

How Can Companies Identify High-Risk Customers?

Not all customers carry the same collection risk.

Companies can use a customer’s previous payment history to assess future risk.

For example:

A customer who consistently pays on time is different from one who is late on every invoice.

A customer who pays part of a debt and then disappears for long periods presents a different risk profile from both.

Companies can therefore classify customers according to their payment history.

This can help management make better decisions regarding:

Credit limits.
Payment periods.
Transaction volume.
The need for advance payments.
The level of follow-up required.

What Happens When Debts Accumulate?

This is where the real problem begins.

Imagine a company with SAR 5 million in receivables, a significant portion of which is overdue.

At the same time, the company must pay suppliers, employees, and operating expenses.

The company may be forced to seek additional financing simply to cover a liquidity gap partly caused by the failure to collect its own receivables.

The company can therefore end up in a situation where:

It owes money to other parties while its own money remains with its customers.

This is one of the most serious scenarios that financial management should monitor.

The Importance of Professional Debt Collection

When the number of customers is limited, internal management may be able to handle collection activities.

But what happens when a company has:

Hundreds of customers.
Thousands of invoices.
Different outstanding amounts.
Old debts.
Customers who do not respond.
Repeated payment promises.
Files requiring continuous follow-up.

At that point, debt collection becomes a specialized function rather than simply a phone call made by an accounting employee.

A specialized debt collection provider can help companies organize their receivables portfolios and follow up on outstanding amounts more systematically, particularly when the volume of debt is significant or cases are numerous.

A Collection Company Is More Than an Entity That Calls the Debtor

The traditional view of debt collection may be summarized as:

“Call the customer and ask them to pay.”

Professional collection is much broader.

It begins with understanding the file:

What is the legal and commercial basis of the debt?
What is the outstanding amount?
What supporting documents are available?
When did the amount become due?
What has happened since the due date?
Has the customer been contacted previously?
Has the customer raised an objection?
Are there payment promises?
Were those promises fulfilled?

The appropriate approach can then be determined based on the circumstances.

This structured process helps ensure that all debtors are not treated in exactly the same way.

When Should a Company Consider Using a Specialized Provider?

There is no single rule that applies to every company, but several indicators may make specialized assistance worth considering, including:

High levels of overdue debt.
An increasing number of late-paying customers.
Old outstanding debts.
Employees spending excessive time on collection activities.
Low internal collection rates.
Repeated payment promises without fulfillment.
The need to organize a large receivables portfolio.
Management’s desire to focus on its core business instead of personally following up on every case.

Do Not Wait Until Receivables Become a Crisis

A common mistake is treating outstanding debt as a future problem:

“The customer will pay.”

“Let’s wait a little longer.”

“The amount is not that large.”

“We’ll contact them again next month.”

But dozens of small decisions like these can eventually result in millions of riyals in accumulated receivables.

Effective management does not wait for the crisis.

It monitors receivables continuously.

What Does This Mean in the Age of Digital Payments?

The Saudi market is experiencing rapid growth in digital payments. The Saudi Central Bank announced that electronic payments accounted for 85% of total retail payments by individuals in 2025, compared with 79% in 2024.

This transformation means that the payment process itself has become faster and increasingly digital.

However, easier payment methods do not automatically mean that every receivable will be collected on time.

The problem may instead relate to:

The customer’s ability to pay.
Credit terms.
Account management.
A dispute over an invoice.
Weak follow-up.
Accumulated debt.

Therefore, collection management must evolve alongside payment methods.

The Future Belongs Not Only to Companies That Sell More

In a competitive market, it is easy for a company to say:

“We want to increase sales.”

But more mature management asks another question:

“How much of these sales will actually turn into cash flow?”

This is the difference between genuine growth and growth that simply looks good in financial reports.

A company may achieve significant sales growth, but if overdue debt increases even faster, the company may find itself in a more difficult financial position despite higher revenues.

There must therefore be a balanced relationship between:

Sales + Credit + Collection + Cash Flow

7 Steps to Protect Your Company’s Cash Flow as BNPL Expands

If your company relies on deferred payment sales or deals with customers who have payment terms, consider the following practical steps:

1. Know Your Customer

Do not extend credit arbitrarily.

2. Document Every Transaction

Keep supporting documents clear, complete, and organized.

3. Set Payment Terms in Advance

Do not leave payment dates open-ended.

4. Follow Up Before the Due Date

Early reminders can prevent many cases of late payment.

5. Monitor the Age of Receivables

Do not look only at the total amount outstanding.

6. Address Delays Early

The longer a debt remains unpaid, the more important structured follow-up becomes.

7. Seek Specialized Assistance When Necessary

This is particularly important when the volume of outstanding files becomes too large for your internal team to manage effectively.

Conclusion: BNPL Is an Opportunity — If You Manage the Risks

The growth of BNPL in Saudi Arabia reflects an important development in financial services and can provide businesses and customers with greater flexibility in completing transactions.

The continued efforts of the Saudi Central Bank to regulate and license BNPL activities also highlight the importance of having an organized regulatory framework for the sector.

For businesses, however, the question should not simply be:

Should we use BNPL or not?

The better question is:

How can we use deferred payment sales without allowing our sales to turn into overdue receivables that drain our liquidity?

The answer begins with a clear credit policy, proper documentation, early follow-up, customer classification, and continuous measurement of collection performance.

When receivables accumulate or collection becomes a burden on internal management, engaging a specialized provider may help the company reorganize its receivables portfolio and focus on recovering outstanding amounts more professionally.

Ultimately, sales are the beginning of revenue, but collection is what turns revenue into actual cash flow that a company can use for growth, expansion, and continued operations.

Need Help Collecting Your Company’s Outstanding Receivables?

If your company has outstanding debts or overdue receivables and needs a specialized provider to follow up on collection activities and organize its debt portfolio, you can contact SAR Debt Collection Company to learn more about solutions suitable for your situation.

SAR Debt Collection Company

Contact Us

+966 53 777 8130
+966 54 419 5383

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Legal Disclaimer

This article is for informational purposes only and provides general information regarding BNPL, receivables management, and debt collection. It does not constitute specialized legal or financial advice. The appropriate procedures and legal or financial implications may vary depending on the circumstances of each case.