Dubai: The Central Bank of the United Arab Emirates (CBUAE) on Saturday unveiled the Regulation on Retail Payment Services and Card Schemes, the fourth provision on the road to improvement as it prepares the UAE for a new era of digital payments.
The new regulation is a continuation of CBUAE’s efforts to provide consumer safety and security with respect to retail payment services and payment card schemes.
The new set of rules introduces a licensing 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 international funds transfers, payment tokens, payment initiation, and payment account information services.
“Digital innovation is rapidly changing the way domestic and global payment services are delivered, and the UAE’s Central Bank is embracing this innovation. We promote digital payments and support competition and innovation, as well as the concept of interoperability, setting high standards for security and risk management, ”said Khaled Mohamed Balama, Governor of CBUAE.
One-year transition period
The new regulation on retail payment services and card schemes was published in the Official Gazette on June 15, 2021 and is effective one month after that date. Existing payment service providers and card schemes have been granted a one-year transition period to obtain the appropriate license from the CBUAE.
“The recent set of payment rules promotes CBUAE’s key role in driving digital innovation while maintaining the security and integrity of payment systems and services. CBUAE will always provide a solid foundation as a guarantor of the stability of financial infrastructure systems, ”Balama said.
CBUAE’s journey to improve its regulatory framework began with the November 2020 launch of the Regulations on Stored Value Objects, a revised licensing and oversight regime for Stored Value Objects to support the development of e-wallets issued by financial institutions and FinTech firms.
This was followed in March 2021 by the “Regulations on large-value payment systems” and “Regulations on retail payment systems”. They provide licensing and assignment regimes for large and retail payment systems, listing detailed requirements that are important to the financial system and are widely used by customers.