Abu Dhabi Islamic Bank (ADIB) has partnered with Fidor Bank to launch the region’s first ‘community-based digital bank’. While details of the requisition process for a permit from the Central Bank have not been released, we do know that the process is not immediate. OPEN DOWNLOAD. (8) of 2017 on Value Added Tax ; Federal law by decree No. According to the Governor of the Central Bank Mubarak Al Mansoori, the issuing of these regulations “is a landmark in supporting the government of UAE’s vision to position the country as a global leader in digital services, via a knowledge-based and innovation driven economy. The UAE Central Bank on Wednesday issued new regulations for "stored value digital payments".. The United Arab Emirates (UAE) is the UK’s largest export market in the Middle East and the 13th biggest globally. The regulations are also designed to foster financial inclusion in the UAE.”. Answer: No. With the new regulation of the UAE Central Bank, we see a move towards regulating and legalising the emergence of PSPs to provide digital payments in the emirates. Launched in March 2018, the service is available for all UAE residents with a valid emirates ID, irrespective of the bank they are with or even if they are unbanked. Designed to promote safe and secure digital payment operations in the UAE, the Regulations: • Mandate a fresh licensing system for digital payment service providers (PSPs), • Establish security protocol for user information and data (to include prohibiting the storage of consumer data outside of the UAE), • Require that PSPs enter into customer service agreements with every individual who uses their services, • Clearly establish rules for outsourcing services to third parties. 8 of 2017 on value added tax (PDF, 1 MB) UAE Cabinet Decision 52 of 2017 on the executive regulations of the Federal Decree Law … Designed to promote safe and secure digital payment operations in the UAE, the Regulations: Mandate a fresh licensing system for digital payment service providers (PSPs) Establish security protocol for user information and data (to include prohibiting the storage of consumer data outside of the UAE) This regulation will form the backbone of this partnership. Service Coverage Interactive Maps Initiative Read more. The system has been operational since August 25, 2001. The Regulatory Framework for Stored Values and Electronic Payment Systems (Regulation) issued by the UAE's Central Bank came into effect on 1 January 2017. United Arab Emirates. 06/11/2020 06/11/2020; by Benjamin Filaferro; The UAE’s Central Bank has announced it has issued new Stored Value Facilities Regulations. … As already mentioned, the regulation also provides strong incentives for consumers to move away from card based e-commerce transactions due to transparency, proper control, and the support of the Central Bank. 2.2 Unless otherwise stated, the Central Bank of the UAE owns the copyright and any other intellectual property rights in all material on this Website including text, … The volume of digital payments in the UAE have recovered to pre-coronavirus levels, boosted by the surge in e-commerce, Network International said on Thursday. They are aimed at ensuring stored value products and services are operated securely, well and efficiently. United Arab Emirates January 26 2017 New Regulations balance innovation in the payments sector with safety, security and maintaining the public’s trust in the UAE payment ecosystem. As of January 1, 2017 the UAE Central Bank’s new regulations for “stored value digital payments” came into effect. Introduction As payment systems are vitally important for the financial sector - and the economy as a whole - the Central Bank plays a leading role in the establishment, development, operation and oversight of payment systems in the UAE. Regulations remain fairly loose, and the Department of Economic Development has been active in directly investing in local businesses (£4.5 million in 2016). On 1 January 2017, the UAE Central Bank issued the Regulatory Framework For Stored Values and Electronic Payment Systems ('the e-Payment Regulation'), with the main aim of facilitating the adoption of safe, secure, 'user-centric' digital payments in the UAE and regulating the digital payments infrastructure and other financial technologies (fintech). This will provide merchants with an immediate incentive to advocate the use of a PSP service over a traditional card payment, especially as lenience and fast transactions can be performed through the use of mobiles and applications. It has also recently clarified that where a DPT may be characterized as either a debenture or as e-money, its policy approach will be to regulate it as e-money. Foreign businesses must register for VAT. 21 January 2021 . The need to move to digital is a worldwide phenomenom that is picking up speed. For PSP vendors, there are clear opportunities in the UAE market to benefit from this regulation and leverage on the same to acquire customer trust through innovative approaches. The initiative will also improve accessibility to payment services to unbanked customers and build on a digital wallet offering to service the latter, increasing the customer base. This is especially true in terms of unconventional means for everyday payment activities in order to address ever-changing customer needs, improve efficiency and better adapt to technology disruptions. New Regulations balance innovation in the payments sector with safety, security and maintaining the public’s trust in the UAE payment ecosystem. While the need exists for PSP to leverage on the means of digital money and deliver effective, easy transactions, the main purpose and scope of these services is the ability to address the four most important selection criteria: Quality of service, public interest, viable value proposition for all parties and security and control. Share. Digital Economy: UAE consumers to pivot away from cash – report Young and digitally savvy populations across the Middle East and Africa region … By proposing the Regulatory Framework for Stored Values and Electronic Payment Systems (Regulation), the new mandates establish binding licensing and related compliance agreements for electronic payment service providers (PSPs) operating in the UAE. The EPS Regulations require that two separate types of digital payment service provider obtain a licence in order to operate in the UAE: 1. The UAE Central Bank on Wednesday issued new regulations for "stored value digital payments".. CBUAE issues a new regulation on SVF to support the development of digital payment services in the UAE. For retail merchants and corporates, PSPs will provide alternatives to payment systems such as e-wallets and electronic payment accounts, creating bank-agnostic access to payments. With the new regulation of the UAE Central Bank, we see a move towards regulating and legalising the emergence of PSPs to provide digital payments in … The UK exported £9.8 billion of goods and services in 2016. As of January 1, 2017 the UAE Central Bank’s new regulations for “stored value digital payments” came into effect. CBUAE issues a new regulation on SVF to support the development of digital payment services in the UAE. The bank also holds an open bank project for FinTech Hackathon. However, this also creates risk for central banks and financial institutions. They are also aimed at giving FinTech companies and other non-bank payment service providers easier access to the local market while safeguarding the customers’ funds, ensuring proper … This webinar will cover the following topics: UAE digital payments strategy – the move to a cashless economy Licensing framework in the UAE Digital payment service providers in the UAE must now comply with a range of new rules including those relating to licensing, data protection and outsourcing. payment services providers offering retail, government, and peer-to-peer digital payment services as well as money remittances; 2. • Cash-out services; enabling cash withdrawals from a payment account Digital media content, like traditional media content, is the subject of extensive regulation in the UAE, and is actively enforced by the authorities. Designed to create a safe and secure digital payment system in the UAE, … CBUAE issues new regulation on SVFs to support digital payments November 4, 2020 The Central Bank of the UAE (CBUAE) issued a new regulation on Stored Value Facilities (SVF) in an effort to ensure that stored value products and services are operated in a secure, sound and efficient manner. Each customer service agreement must meet the minimum requirements, to include presenting the PSPs privacy policy to the user. United Arab Emirates – the New Digital Payments Regulatory Landscape . FAQs on Standards - 01 03 2018 Final. No credit cards or debit cards in scope: The new regulation clearly distinguishes between transactions originated from credit and debit cards, keeping out those wallets dependent on these means of payment. This makes it more acceptable by the public and more controlled by accommodating digital payments while ensuring the highest levels of consumer protection and financial stability. Print article People's Bank of China China’s central bank has proposed new regulations to protect competition in the digital payments market as part of the country’s ongoing effort to rein in major homegrown technology companies. Started in India, CCAvennue is now a popular online payment gateway in UAE. It is in line with the CBUAE’s objectives aimed at safeguarding the stability and integrity of the financial system and The latest edition, UAEFTS 3.0, has been functioning since March 2012. Among these partnerships are: DIFC Hive — the FinTech accelerator: A joint FinTech programme with the DIFC and Accenture which channels Dubai’s ambitions to be a leader in the global FinTech industry. This includes using electronic, mobile or magnetic means of payment, excluding credit and debit card payments within the UAE. As set out in Question 9, there may also be other obligations imposed on digital payment systems providers, such as an obligation to store transaction and user data within the UAE. Secondary Source. In accordance with the principle of technological neutrality set out in the Digital Agenda for Europe, this Regulation should apply to card-based payment transactions regardless of the environment in which this transaction takes place, including through retail payment instruments and services which can be off-line, on-line or mobile. The Monetary Authority of Singapore (MAS) has issued three new consultations each dealing with different aspects of the regulation of digital payment tokens (DPTs) under the Payment Services Act (PSA). • Opening up new distribution opportunities, leveraging on alternative channels to offer core banking products. Emirates NBD has launched a new innovation lab with a wide-ranging brief, from the cultivation of user-friendly, client-facing design and services through to back office re-engineering. Applicants should be aware that it may take up to four months from receipt of application to obtain a response from the Central Bank. … On 1 January 2017, the Central Bank of the United Arab Emirates issued the Regulatory Framework For Stored Values and Electronic Payment Systems (Regulations). Box 116564, Telephone: +971 4 3469262    |    Fax: +971 4 3469272 • Regulated competition standards in terms of charging and limits, where the initiative clearly defines the type of fees and captures all the limits possible The customer can initiate a payment or inquire about their financial situation through a simple application on his or her mobile or tablet. View UAE tax laws and procedures (VAT and excise) on the website of the Federal Tax Authority. PayPal UAE: PayPal is used for online transactions. From this date, any individual or entity providing digital payment services in the UAE without the appropriate license or authorization under the Regulations may face administrative penalties, subject to a limited interim … Designed to create a safe and secure digital payment system in the UAE, among other things, the Regulation: Establishes a new licensing regime for digital payment service providers (PSPs) However these message types will con nue for other currency payments. PayPal protects your financial information like your card details and your banking information, and you do not have to disclose your financial details every time to the merchants whom you are paying. The UAE Central Bank’s Regulatory Framework for Stored Values and Electronic Payment Systems (the Regulation) is a key piece of legislation which recognises the significance of, and regulates, this rapidly growing market. UAE: Central Bank Issues New Digital Payment Service Regulations News developments ... UAE: Central Bank Issues New Digital Payment Service Regulations. Like Saudi Arabia, the UAE has also adopted the GCC’s Unified VAT Agreement about digital taxes on foreign sellers. This might include institutions similar to paypal, Beam, Etisalat Visa, and Emirates NBD who all currently run digital payment platforms targeted at various individuals from all segments of the UAE. United Arab Emirates January 26 2017 New Regulations balance innovation in the payments sector with safety, security and maintaining the public’s trust in the UAE payment ecosystem. Here are the basics: The VAT rate for digital products is 5% with no registration threshold. In 2016, the Gambling Supervision Commission (GSC) and Treasury approved regulation to allow digital currencies including bitcoin to be accepted as cash. Central Bank Systems The Central Bank owns and operates the UAE's most important payment systems: With PayPal in UAE, you can save time shopping online and sending money.And you get more ways to cover your payments. 269-2016 + Amendments to EH Regulations. A Payment Service Provider (PSP) is any organization or individual that provides digital payment services. Rather than apply for specific individual licenses, commercial banks aspiring to provide online payment services must obtain approval from the Central Bank. Under these regulations, providers of digital payment systems in the UAE may be required to obtain a licence from the Central Bank. United Arab Emirates – the New Digital Payments Regulatory Landscape . Central bank of the UAE releases updated regulatory guidelines for digital payments or stored value facilities. How will traditional banking be affected? • Micropayment PSP All PSPs must submit an application for and receive a license covering one of the PSP subcategories (with the exception of commercial banks). Primary Source. With the introduction and spread of digital money means in the UAE, the Central Bank is facilitating a robust adoption of digital payments across the country in a secure manner. Mobile Payment Users: Any type of payment using their mobile devices within the past year: 64%: Mobile Wallet Owners: Having a mobile wallet application, including but not limited to Apple/Android/Samsung Pay : 39%: Frequent Pays Owners: Makes payments once a week or more using a Pay service: 5% Oliver Reppel is managing director for financial services Middle East, and Naim Alame is financial services manager at Accenture. Data protection and consumer service agreements. • Money remittances. On 1 January 2017, the Central Bank of the United Arab Emirates issued the Regulatory Framework For Stored Values and Electronic Payment Systems (Regulations). The UAE-based enabler of digital business said it had seen a strong rebound in total processed volume (TPV) in its home market by the end of the year, with a pick-up in tourism also making an impact. They also charge 3% on every transaction. Charles McConnell. If this is the case, there will likely be a huge impact on the UAE’s emerging PSPs. "Newer payment methods, such as Apple Pay and other wallets, are very gradually starting to make their presence felt," said Sirish Kumar, co-founder and CEO of Telr. On January 1, 2017, the UAE's Central Bank published the Regulatory Framework for Stored Values and Electronic Payment Systems (Digital Payment Regulation). Marasi Drive, Business Bay, Dubai, UAE. Beyond bitcoin, payments saw its share of innovation in developing markets, powered in part by financial hubs. For general inquiries: info@alshamsilegal.com    |    Emergency number: 0526444409, Kindly send your CV with a Cover letter to, Mobile Number: +971 052 628 4783 | Weekend Emergency: +971 526444409, Tips For Finding The Right Lawyer In The UAE, Fundraising Laws In Dubai, What you need to know, The UAE Labor Laws: What You Need To Know, DIFC Data Protection Law – Actions Required By Businesses, Complex Dispute Resolution Clauses in Contracts, The New Family Contract Law: A New Era For the Succession of Family Estates, Can I make a Power of Attorney during the COVID-19 Outbreak, Negotiating with Landlords in a Time of Crisis: The Legal Approach, International Comparative Legal Guides – Litigation & Dispute Resolution 2020. • Non-issuing PSP, The types of services that can be offered through the identified PSPs I. UAE Central Bank The Central Bank has issued the Regulatory Framework for Stored Values and Electronic Payment Systems on 1 January 2017 (‘Regulation’). They also offer zero setup fee option but that comes with a large monthly maintenance fee of $54.45. This exclusion will clearly impact initiatives that are already in the market. PSPs can provide value add here, making these types of payments more widely accepted due to the regulation provided through licensing. UAE Cabinet Decision 52 of 2017 on the executive regulations of the Federal Decree Law No. There is also the added element of giants such as Alibaba, Apple Pay, PayPal, Android Play and others potentially entering the market. To read more Subscribe to Global Competition Review. • Open up markets for giants like Apple Pay, AndroidPay and PayPal, which currently do not support the UAE’s dirham currency. Online payments grow on back of technological advancements. DIFC Academy in association with Pinsent Masons proudly presents Digital Payments Regulation across the Middle East, with a spotlight on the UAE. PSD2 — the second Payment Services Directive designed by the countries of the European Union — has evolved under this spectrum where payment service providers (PSPs) and FinTechs can provide a payment instrument to customers simply by connecting to the banks. Customers also demand more transparency on payment execution, including charge validation and acceptance before executing a payment. The new regulation is still at an early stage in the UAE, and collaboration between payment players and banks is essential for this initiative to provide a seamless and efficient service to citizens. The central bank in the UAE has issued new regulations … The Standards for Exchange Business in the UAE (Version 1.10) – 01.03.2018 for Issue (Clean) OPEN DOWNLOAD. Micropayment payment services provider: Payment services providers offering micropayments solution facilitating digital payments targeting the unbanked and under-banked segments in the UAE; 3. The UAE also is working with Saudi Arabia to develop an interbank cryptocurrency to facilitate cross-border payments and has established a regulatory “sandbox” for new blockchain projects. Head Office: Office 107, Some of the benefits that can be observed are: • Market entry facilitation. Pyypl, a Dubai-based, blockchain-powered fintech which claims to plug smartphone users into the financial system, started up five years ago. P.O. 35-2018 The Standards for Exchange Business 01-03-2018. Contrary to popular belief, such regulations also apply to businesses in free zones. The following concepts and definitions are central to comprehending the various aspects of the Regulation. © 2020 MOTIVATE MEDIA GROUP. Posted on January 15, 2021. What digital payment regulation means for the UAE, Abu Dhabi announces Dhs6bn boost for SMEs, Emirates to indefinitely suspend flights between Dubai and Melbourne, Sydney and Brisbane, Sharjah: Staff at private educational institutions must pay for mandatory PCR test every 14 days, Wizz Air Abu Dhabi plans Tel Aviv flights from Feb with fares starting from Dhs99. UAE: Dubai; UAE: Ras Al Khaimah; ... and will see all electronic payment methods come under the regulation of the CBK. With the UAE government seeking 50 percent of all government transactions conducted on blockchain by 2021, the Regulatory Framework contradiction is likely to be resolved via repeal. After a long period … Any organization receiving online payments in the UAE prior the establishment of the new Regulations will have one year to reach full compliance or face penalty by the UAE’s Central Bank, to include extensive fines and/or termination of services. • Expanding into some previously unprofitable customer segments by servicing non-core customer segments. The UAE Central Bank’s Regulatory Framework for Stored Values and Electronic Payment Systems (the Regulation) is a key piece of legislation which recognises the … OPEN DOWNLOAD. A direct impact of the use of digital money and stored value will be a reduction in the dependency on traditional cards and cash based methods to complete e-commerce transactions. Beyond bitcoin, payments saw its share of innovation in developing markets, powered in part by financial hubs. However, any PSP wishing to begin new online payment services must comply with the new Regulations immediately. The UAE Funds Transfer System (UAEFTS) is the Real Time Gross Settlement (RTGS) system of the United Arab Emirates, hosted by the Central Bank of the UAE. • Improving operating model efficiency related to the adoption of innovative solutions to increase efficiency. Ques on 3: Is it possible for Banks in UAE to send payment/receive AED payments via SWIFT message from UAE Banks? The Regulations further breakdown the sentiment of a PSP into four distinct sub-categories: Retail PSPs, Micropayments PSPs, Government PSPs, and Non-issuing PSPs. Under the e-Payment Regulation, four categories of PSPs are eligible to provide digital payment services within the UAE: Retail, Micropayments, … It spearheads a nation-wide initiative to reduce the use of cash in the UAE and supports the UAE government's efforts to drive digital transformation. Ques on 4: Is there any limit on the amount … OPEN DOWNLOAD. There are many reasons for them to start collaborating with PSPs and FinTech players, including: • Engaging digitally savvy customers where they can enrich their offering on specific target customers, leveraging on partnerships with PSPs. Meanwhile, FAB’s Payit claims to be the UAE’s first fully-featured digital wallet, enabling consumers to make cashless transactions. With the implementation of such an initiative, and the allowance of PSPs to provide the instruments for payments, there is a clear impact on traditional banking. are channels that help users to store money digitally and make digital payments or transactions. Note that the PSA will … From this date, any individual or entity providing digital payment services in the UAE without the appropriate license or authorization under the Regulations may face administrative penalties, subject to a limited interim … The new regulation constitutes an important milestone in the continued development of a robust regulatory framework for stored value facilities and the digital payments industry as a whole. UAE-based telecoms giant Etisalat plans to invest AED4 billion ($1.09 billion) in digital transformation, mobile and fibre networks this year, according to a senior executive. Emirates Digital Wallet LLC (EDW) owns and operates klip, the UAE's Digital Cash Platform. This should result in lower payment processing costs. What should banks do? 2.1 These Intellectual Property terms form part of the Central Bank of the UAE website general Terms and Conditions. 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