How to Obtain Payment Service Provider License in UAE

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Shuraa Business Setup
HOW TO OBTAIN
PAYMENT SERVICE PROVIDER (PSP)
LICENSE IN UAE
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If youre looking to get a PSP license in the
UAE, youre on the right track to entering the
growing world of digital payments. A PSP license
allows you to offer businesses and consumers
online payments, digital wallets, and other
payment solutions. The UAE has a transparent and
supportive system for businesses in the fintech
industry, making it an exciting place to start.
To help you understand this process quickly,
well explain everything you need to know about
obtaining a PSP license in the UAE. From
understanding the basic requirements to the
application process, well guide you step by step.
More Information
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WHAT IS A PAYMENT SERVICE PROVIDER?
A Payment Service Provider (PSP) is a company or
financial institution that facilitates online
business payment processing. It helps them to
accept customer payments through various methods.
PSPs provide the technology and infrastructure to
handle payment transactions, such as credit/debit
cards, e-wallets, bank transfers, and other
payment methods.
PSPs act as intermediaries between merchants and
financial institutions (like banks). It may offer
additional services such as fraud protection,
recurring billing, and currency conversion.
Examples of PSPs include PayPal, Stripe, and
Square.
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HOW DOES PSP FUNCTION?
A Payment Service Provider (PSP) is an
intermediary between merchants, customers, and
financial institutions. Heres a simplified
breakdown of how a PSP operates
Transaction Initiation
Transaction Completion
Payment Authorization
Fund Transfer
Payment Processing
Post-Transaction Services
Transaction Approval or Decline
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PSP LICENSE REGULATIONS IN UAE
Starting a Payment Service Provider (PSP)
business in the UAE, like any other business
setup. It requires obtaining the appropriate
trade license and approvals. The Central Bank of
the UAE (CBUAE) regulates the digital payments
sector in the UAE.
Below is a simplified guide to help you
understand the licensing options for operating as
a Payment Service Provider in the UAE.

1. DIFC License Free Zone (Dubai)
2. ADGM License Free Zone (Abu Dhabi)
3. Stored Value Facility (SVF) License Mainland

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DIFC LICENSE FREE ZONE (DUBAI)
The Dubai International Financial Centre (DIFC)
is one of the leading financial hubs in the UAE.
It is regulated by the Dubai Financial Services
Authority (DFSA). The types of PSP licenses
available here include

1. Category 4 License Allows money transmission
   services with a minimum capital of USD 140,000.
2. Category 3D License Covers payment accounts and
   payment instrument issuance, with a capital
   requirement of USD 200,000.
3. Category 3C License Required for wallet
   services, with a capital requirement of USD
   500,000.

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ADGM LICENSE FREE ZONE (ABU DHABI)
The Abu Dhabi Global Market (ADGM) is a prominent
financial hub in the MENA region. To conduct
payment services within ADGM, you need a PSP
license from the Financial Services Regulatory
Authority (FSRA). This includes activities like

• Money transmission and issuing stored value.
• Operating payment accounts and executing payment
  transactions.
• Providing or operating a payment account.

Capital Requirement USD 250,000 for a Category
3C license.
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STORED VALUE FACILITY (SVF) LICENSE MAINLAND
Introduced in September 2020, the SVF license
allows businesses to issue and operate Stored
Value Facilities (SVFs) like e-wallet services in
the UAE. There are different types of SVF
licenses

• Device-based SVF Uses physical devices (e.g.,
  prepaid cards, watches).
• Non-device-based SVF Uses network-based accounts
  (e.g., mobile e-wallets).
• Single-purpose SVF For specific non-monetary
  goods or services (closed-loop systems).

Capital Requirement for SVF License At least AED
15 million in paid-up capital.
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SVF LICENSE REQUIREMENTS

• The principal business must be issuing SVFs.
• Obtain approval for secondary businesses.
• Ensure sufficient financial resources and
  implement strong risk management policies.
• Comply with the Central Banks AML/CFT
  regulations.

Whether you want to set up a payment service
provider license in Dubai or elsewhere in the
UAE, various licensing options are available
based on your business model and services. If
youre interested in free zones, the DIFC and
ADGM provide flexible options with favourable
conditions for PSP businesses.
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Shuraa Business Setup
Types of Payment Service Providers
The UAE regulatory framework for stored values
and electronic payment systems recognises four
Payment Service Providers (PSPs) types. Heres a
breakdown of each type
1. Retail PSP
These are authorised business banks and other
approved PSPs offering retail, government, and
peer-to-peer (P2P) digital payment services. They
also facilitate cash remittances, allowing
consumers to transfer money digitally. To operate
as a retail PSP, entities must acquire a PSP
license in the UAE to offer these services
legally.
2. Non-giving PSP
These entities do not offer stored value services
(i.e., they dont hold customer funds) but still
provide digital payment solutions. They
facilitate government, retail, and P2P digital
payments but are not involved in storing funds.
These PSPs must still comply with the regulatory
framework and obtain the appropriate PSP license
in Dubai to operate in the UAE market.
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Shuraa Business Setup
3. Government PSP
These PSPs are specifically designed for federal
and local government entities, enabling them to
provide digital payment solutions for public
services, taxes, fines, and other governmental
transactions. These services must also be
licensed in the UAE, and the PSP license is
issued to ensure they meet the necessary
regulatory requirements.
4. Micropayments PSP
This type of PSP focuses on offering payment
solutions for smaller transactions, often
catering to the unbanked and under-banked
populations. Micropayments PSPs facilitate
digital payments for low-value transactions,
typically through mobile wallets or other online
platforms. Businesses offering such services must
obtain a PSP license in Dubai to comply with
local regulations.
To operate legally in the UAE, businesses need
the relevant PSP license in Dubai or the UAE,
depending on their operations and services. This
licensing ensures compliance with the countrys
financial regulations and facilitates secure,
reliable digital transactions.
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How to Obtain a PSP License in the UAE
To obtain a PSP license in the UAE (Payment
Service Provider license), businesses must go
through a specific regulatory process set by the
UAE government to offer payment services legally.
Heres a step-by-step guide on how to obtain a
payment service provider license in the UAE
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Step 1
Understand the Regulatory Framework
The UAE Central Bank is the primary authority
that regulates payment service providers (PSPs)
in the country. Businesses must comply with the
regulations set forth by the Central Bank to
operate legally as a payment service provider in
the UAE.
Step 2
Understand the Regulatory Framework
The applicant company must meet specific
eligibility requirements, such as

• Being a registered legal entity in the UAE
  (typically in Dubai or another emirate).
• Having adequate infrastructure to offer payment
  services (such as secure payment gateways or
  financial platforms).
• Meeting capital requirements as set by the
  Central Bank.

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Step 3
Choose the Right Business Setup
Decide whether to set up your business in a free
zone, mainland, or offshore, as this can impact
the licensing process

• Dubai Setting up a business in Dubai allows you
  to obtain a PSP license in Dubai. It enables you
  to operate within the city and across the UAE.

• Free Zones Several free zones in the UAE also
  offer payment service provider licenses, but the
  restrictions vary by zone.

Step 4
Prepare the Required Documents
The documents typically required include

• A Business plan

• AML and KYC compliance proof.

• Company formation documents include the
  Memorandum of Association (MOA) and Articles of
  Association (AOA).

• Identification documents for all shareholders and
  directors.

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Step 5
Submit the Application to the UAE Central Bank
Apply for a payment service provider license in
the UAE to the Central Bank, along with the
required documentation. This application will be
reviewed for compliance with UAE laws and
financial regulations.
Step 6
Obtain Approval from the Central Bank
After the submission, the Central Bank will
review your application. Once approved, you will
be granted the PSP license in the UAE. It allows
you to offer payment services legally within the
country.
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Step 7
Comply with Ongoing Regulations
Once licensed, you must comply with the UAEs
ongoing regulatory requirements, including
regular audits, reporting, and maintaining AML
and KYC standards.
Step 8
Start Operations
Once you have obtained your payment service
provider license in Dubai or elsewhere in the
UAE, you can begin offering your payment
solutions to clients.
Following these steps, you can obtain a PSP
license in the UAE and offer payment services in
Dubai and beyond.
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PSP License UAE Requirements
To obtain a PSP license in Dubai, the following
requirements must be met

• Company Structure A UAE-based company or branch
  in a Free Zone or DIFC.
• Application Submit a business plan, demonstrate
  financial stability, and pass a fit-and-proper
  test for key personnel.
• Capital Minimum capital requirements range from
  AED 1 million to AED 5 million.
• Compliance Strong AML, KYC, and data protection
  measures.
• Technology Secure payment systems and data
  protection in place.
• Ongoing Obligations Regular audits and financial
  reporting.
• Regulatory Oversight Compliance with Central
  Bank of the UAE or DFSA regulations.

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PSP License UAE Cost
The PSP license UAE cost involves both an
application fee and license fees, with prices
typically starting from around USD 15,000. This
includes the initial application process and the
associated licensing fees for businesses offering
payment services in the UAE.
It is essential to consider that the PSP license
UAE fees may vary depending on specific
requirements, the nature of the business, and the
free zone or regulatory authority involved. If
you want to know the exact cost, you can contact
our Shuraa business setup experts.
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Obtain Your PSP License in the UAE with Shuraa!
In conclusion, getting a PSP license in the UAE
is essential for digital payment services
businesses. The straightforward process allows
firms to operate in a safe, regulated environment
that builds customer trust. Following the steps
and meeting local regulations, businesses can
successfully get their PSP license in the UAE and
offer payment solutions.
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