In the Gulf, BNPL companies present themselves as an alternative to cash on delivery, the most common payment method for online purchases in many Middle East countries. However a cultural challenge for BNPL in the Gulf is to make sure it "doesn't look or smell like credit." as Islamic customs prohibit charging interests on loans, which has deterred some Middle East consumers from using credit cards.
Saudi Arabian-based Tamara and UAE's Spotii, Tabby and Postpay all say the take-up has far exceeded initial expectations. And investors are paying attention. Tamara last month raised $110 million in debt and equity, a large amount for an early stage Middle East start-up. This week, Australia's second biggest BNPL player Zip (Z1P.AX) said it was buying the rest of the shares in Spotii it did not already own for $16 million. Tabby has raised over $30 million including funding from Abu Dhabi state fund Mubadala.