Central Bank of the UAE issues retail payment services and card schemes regulation

The Regulation is a continuation of the CBUAE’s efforts to foster safety and soundness for consumers regarding retail payments services and the operation of payment card schemes. The Regulation introduces a licencing regime for payment service providers operating – or wishing to provide – one or more of nine payment services or payment card schemes in the UAE. These include: payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic and cross-border fund transfers, payment tokens, payment initiation, and payment account information services.

The new Retail Payment Services and Card Schemes Regulation was published on the Official Gazette on June 15 2021 and comes into force one month from that date. A one-year transitional period has been given to existing payment service providers and card schemes to obtain the relevant licence from CBUAE. CBUAE’s regulatory enhancement journey began with the launch of the ‘Stored Value Facilities Regulation’ in November 2020, an amended licencing and supervisory regime for Stored Value Facilities to support the development of e-wallets issued by financial institutions and fintech firms.

This was followed by the launch of the ‘Large Value Payment Systems Regulation’ and the ‘Retail Payment Systems Regulation’ in March 2021. These provide licencing and designation regimes for large value and retail payment systems, listing detailed requirements that are important to the financial system and largely used by customers.