A payment Service Provider (PSP) in Dubai 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 stores.
Currently, E-Commerce is booming around the world, and people are opting for online shopping and paying online as well. Dubai is an international city, and 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.
Types of Payment Service Providers (PSPs) 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. For your business setup in Dubai, you need to know the following:
- 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 by 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.
Requirements to Obtain a PSP License in Dubai
To obtain the PSP business 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 he/she falls into 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 he/she 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 fulfill 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.
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 applications, and response to any queries from the Central Bank. We request you 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.
What are the benefits of a PSP license in Dubai?
- 100% foreign ownership
- No restriction on hiring foreigners as employees.
- Cross border activities permitted
- Biggest Fund domicile in Dubai
How does a PSP work?
Once the customer has entered his/ her card details and then clicks the pay button, the transaction request is sent to the payment gateway. The PSP will then check if the card details entered are correct & whether that person’s bank has a sufficient balance or not. Once these 2 criteria are fulfilled the transaction will take place.
What are PSP fees?
It's the fee or commission charged by the PSP for executing the transactions for your business.
How do the internal policies work for a PSP license in Dubai?
Applicants also have to prove that they have adequate internal policies and also fulfill the minimum capital required for the business.
What are the four main types of payment service providers?
They are as follows:
- Retail PSP
- Micropayment PSP
- Government PSP
- Non-Issuing PSP.