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Obtaining a Payment Institution license in the UAE

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Obtaining a PI license in the UAE in 2020

Benefits of obtaining a payment system license:

  • World's center of business and financial activity;
  • Attraction of foreign investment;
  • Highly developed banking structure;
  • The ability to obtain a license for a certain category of payment service providers;
  • A favorable environment for doing business.
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The payment service provider license in the UAE is issued in accordance with an updated EPSR. According to the provisions of the Regulation, the company can apply for the 4 types of licenses:

  1. License for retail payment service providers (commercial banks and other PSPs).
  2. License for micropayment service providers which operate in non-banking markets.
  3. License for state enterprises providing payment services;
  4. License for PSPs, which do not accept deposits and those, who offer electronic payment services.
Applying for a PI License

In order to obtain a PSP license in the UAE you will need to apply to the CBUAE, located in Abu Dhabi. The exception in this case applies only to UAE licensed commercial banks, which can be authorized according to a simplified scheme.

Regarding the PI licensing regime in the UAE, there are some requirements that apply to all 4 categories of licenses.

Conditions for obtaining a payment institution license

The main requirement for those, who plan to obtain a payment system license in the Emirates, is that they must prove that their business belongs to one of the 4 categories indicated above. In addition, the applicant must located in the Emirates, or in the Free Zone (the exception applies to entities from free financial zones).

You will also have to convince the CB, that you have the relevant knowledge and experience required to offer E-payment services in the manner prescribed by the requirements.

Entrepreneurs, applying for obtaining a PSP license in the UAE is also required to fulfill the following requirements regarding share capital and to implement and proof:

  • The existence of effective compliance policies;
  • Corporate governance mechanisms and remedies, such as the internal audit unit.

Among other things, the process of business licensing for providing payment services requires compliance with user registration conditions, including the KYC. The company must also fulfill liabilities aimed at CFT, as well as ensuring the safety and transparency of transactions.

In addition, if you want to obtain a PSP license in the Emirates, it will be necessary to introduce certain security mechanisms for consumer protection, including:

  • Entering into contract with each user;
  • Providing customer support services;
  • Providing procedures for resolving disputes.

It is also important to note that the company ordering a PI license in the UAE will have to meet with privacy and data protection liabilities, including:

  1. Storage of transaction records and user data in the UAE for a minimum period (5 years from the date of termination of relations with the user);
  2. Non-disclosure of personal information of users to third parties.

Confidential information may be submitted to regulatory authorities only with the permission of the CBUAE or by decision of the UAE court.

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Legal support

All information presented above is published for informative purposes, and cannot be perceived by the reader as legal advice or recommendations for action. Please, note that obtaining a payment institution license in the UAE is a complicated process that requires a responsible approach and reliable support.

If you have any questions regarding the payment system licensing process in the Emirates, IQD Consulting specialists are ready to provide you with comprehensive legal advice on obtaining a PI license.

In addition, our experts provide accompanying services at all stages of obtaining a license. We are ready to help you in collecting a package of documents for a PSP license in the UAE, registering a company in the Emirates, and provide other related services.

You can learn more details about our services, or to order legal advice on licensing a payment institution in the UAE, by filling out the feedback form, or by calling our office right now through the contacts listed below.

  • The information outlined in the article is actual at the time of its publication.
  • Please refer to our specialists for checking possible solutions for your business.
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    Fill out the form or contact us as you find convenient. Our experts will help you resolve the issue.

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