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CBUAE issues new regulation for retail digital payments

The Central Bank of the United Arab Emirates (CBUAE) on Saturday unveiled the Retail Payment Services and Card Schemes Regulation, the fourth regulation in the enhancement journey as it prepares the UAE for a new era of digital payments.

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 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 cross-border fund transfers, payment tokens, payment initiation, and payment account information services.

Khaled Mohamed Balama, Governor of the CBUAE, said, “Digital innovation is rapidly reshaping the provision of domestic and global payment services, and the Central Bank of the UAE is embracing this innovation. We promote digital payments and support competition and innovation as well as the concept of interoperability, while setting high standards for safety and risk-management.

UAE Central Bank

Balama added, “The recent set of payment regulations promotes the pivotal role of CBUAE in fostering digital innovation while maintaining the safety and integrity of payment systems and services. CBUAE will always provide a solid foundation as the guardian of the financial infrastructure systems stability.” The new Retail Payment Services and Card Schemes Regulation was published on the Official Gazette on 15th June 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 license from CBUAE. CBUAE’s regulatory enhancement journey began with the launch of the ‘Stored Value Facilities Regulation’ in November 2020, an amended licensing 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 licensing 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.

Khaled Mohamed Balama has inaugurated recently the 2nd edition of the flagship initiative, the “CBUAE Youth Dialogue”. This year’s event was held to celebrate the council’s second anniversary and involve the CBUAE’s youth in championing innovation and technology to achieve the UAE’s ‘Towards the Next 50’ strategy, in accordance with its upcoming Golden Jubilee.

The event discussed pertinent trends shaping the financial and banking sectors, such as blockchain, FinTech, RegTech, and the promise of these technologies in powering the 50-year strategy, which would enrich the thinking of the youth and prepare them to lead the sector in the future.

CBUAE Youth Dialogue imitative included a speech by Omar Bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Teleworking Applications, in which he spoke about the importance of artificial intelligence in the development of the UAE’s economy. During his opening remarks, Balama said, “Over the past fifty years, and an embodiment of the vision of its wise leadership and the aspirations of its people, the UAE has laid the foundations for the growth and prosperity of its community. We at CBUAE aim to empower the youth in facilitating yet another fifty years of progress for the UAE, underpinned by an innovative spirit and a robust understanding of progressive technologies.”

He added, “It is of the utmost importance for CBUAE to educate the generation of tomorrow on the tremendous role they play in realising the ambitious vision set forth by our leadership, as well as the pivotal application of financial technologies in achieving so. We take great pride in having hosted the second edition of the Youth Dialogue in this regard and are confident that the CBUAE Youth Council will continue to effectively represent and enlighten the next era of changemakers.” The Youth Dialogue brought together senior employees from CBUAE and other UAE regulators, including Abu Dhabi Global Market, Dubai International Financial Centre, and Dubai Blockchain Centre.

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