How to Obtain a Payment Service Provider (PSP) License in Dubai?

by Zaara 20, Oct 2020

How to Obtain a Payment Service Provider (PSP) License in Dubai?

Payment Service Provider (PSP) is a necessity in this modern age that offers online shopping services through electronic payments by using methods like direct debit, credit card, online bank transfer etc. while acting as a mediator between banks and customers. In simple words, it is an online payment solution for multiple channels, including phone and online store.

Currently, E-Commerce is booming around the world, and people are opting for online shopping and paying online as well. Dubai, being an international city due to which PSPs are even more critical for people residing here as this online method, provides support for multiple payment methods and multiple currencies, which is extremely important in Dubai.

As per the Regulatory Framework for Stored Values and Electronic Payment System, there are four main types of Payment Service Provider services recognized in the Emirate. They are –

  • Retail PSP - Authorized commercial banks and other licensed PSPs offering retail, Government, and peer-to-peer digital payment services as well as money remittances
  • Micropayments PSP - PSPs offering micropayments solution facilitating digital payments targeting the unbanked and under-banked segments in the UAE
  • Government PSP - Federal and local Government statutory bodies offering Government digital payment services
  • Non-issuing PSP - Non-deposit taking and non-issuing institutions that offer Government, retail, and peer-to-peer digital payment services

The bodies providing the following payment services will not be subject to regulations –

  • Payment transactions in cash with no involvement of a mediator
  • Payment transactions using a debit  or credit card
  • Payment transactions with paper cheques
  • Payment instruments accepted as a means of payment only to purchase goods or services provided from an issuer — closed-loop payment instruments such as rewards programs or loyalty cards that a department store issues to a user to spend only in that department store
  • Payment transactions within a payment/settlement system between settlement institutions, clearinghouses, central banks and PSPs
  • Payment transactions associated with the transfer of securities/assets (including income, dividends, and Investment Services)
  • Payment transactions carried out between PSPs (including their agents/branches) for their accounts
  • "Technical Service Providers," well-defined as entities providing support services to PSPs but which do not handle user funds, like processing and storage of transactional data; privacy protection services; IT network provision; data and entity authentication; and provision and maintenance of terminals and devices used for payment services

How to Obtain a Dubai PSP License?

To obtain the PSP License in Dubai, the applicant has to meet a few requirements. They are –

  • The primary requirement for an applicant is that it has to show that it falls in one of the categories mentioned above
  • The second requirement is that the applicant should be located in Dubai or any of the free zones
  • The applicant also has to prove that it has the required experience and personnel to deal with digital payment services
  • Applicants also have to prove that they have adequate internal policies and also fulfil the minimum capital required for the business

The fee for an application for a license varies on a case to case basis. However, considering that it is one of the most sought after licenses, it can be a valuable investment for any business.

How can we help?

Our team at Commitbiz has experienced professionals who will assist you through the entire procedure of UAE PSP License application including assistance in the preparation of documents, submission of application and responding to any queries from the Central Bank. We request you to get in touch with our consultants at the earliest to understand the entire process in detail and apply for a UAE PSP License.

Contact us – we'd be happy to assist you.