Prepaid Cards in Egypt

Author: Randa Shouma

The Central Bank of Egypt (“CBE”) defined prepaid cards, in its Circular dated 8 May 2019 organising the Rules for Payment Services Using Prepaid Cards (the “Prepaid Cards Rules”), as electronic payment cards, where customers load funds in advance and can subsequently use them for transactions, including purchases, transfers, and cash withdrawals, based on the prepaid balance. These cards come in various types, such as:

  1. Open Prepaid Cards as cards with no restrictions or conditions can be used for cash withdrawals, deposits, transfers, and purchases through Point of Sale (“POS”) machines or online (E-Commerce). They can be used with any merchant or establishment without specific limitations.
  2. Semi-Closed Prepaid Cards can only be used for purchases through POS machines or online (E-Commerce). Cash withdrawals are not possible, and they can be used with any company or establishment without specification. An example includes gift cards.
  3. Semi-Open Prepaid Cards can only be used for purchases through POS machines and do not allow cash withdrawals. They can be used with a specific group of companies, establishments, or restaurants. An example is a prepaid card for a group of amusement parks or restaurants, etc.
  4. Closed Prepaid Cards can only be used with a single merchant or company and does not allow cash withdrawals or online purchases. They are typically part of a specific system designed for that merchant or company.

1.1 Regulatory Controls for Prepaid Card Services in Egypt

Regulatory Controls on Prepaid Card Payment Services in Egypt are designed to ensure the security, transparency, and proper management of prepaid card issuance and usage. These controls are enforced by the CBE to maintain the integrity of the financial system. Under this regulatory framework, prepaid card services operate within a structured set of rules and guidelines, including the exclusive issuance right reserved for banks holding a license from the CBE. This exclusive right sets the foundation for Prepaid Card services regulatory controls.

1.2 Statutory Oversight

The Prepaid Card Rules apply to prepaid cards without prejudice to the regulatory controls for:

  1. Electronic Banking Operations previously issued by the CBE in accordance with the periodic circular issued in 2002 and subsequent circulars, which serve as:
    1. a comprehensive framework for governing electronic banking activities and the issuance of electronic money payment methods, outlining key principles and responsibilities for banks and customers involved in electronic banking,
    2. provide a robust framework for ensuring the safe and efficient operation of electronic banking services in Egypt, as they aim to protect both banks and customers while facilitating the growth of electronic banking in the country; and,
    3. promote transparency, security, and compliance within the electronic banking sector, contributing to the growth and development of this industry in Egypt,
  2. Customer Due Diligence Procedures for Prepaid Card Service issued in March 2020 by the CBE’s Anti-Money Laundering and Counter Terrorism Financing Unit (the “CDD Procedures for Prepaid Cards”),
  3. Anti-Money Laundering & Counter Terrorism Financing Controls issued by the CBE on 19 February 2003, considering the provisions of the Anti-Money Laundering Law no. 80 of 2002, and its executive regulations issued by Cabinet Decision no. 951 of 2003 and its amendments; in addition to the forty-nine recommendations on anti-money laundering issued by the Financial Action Task Force (“FATF”) in 1990 and 2001,
  4. The Instructions for Internal Control in Banks issued in September 2014; and,
  5. The Instructions for Bank Customer Rights issued in February 2019.

1.3 Licensing Procedures for Service Provision

To facilitate the process of offering Prepaid Card Payment Services, banks seeking approval from the CBE must provide comprehensive details about the types of cards they intend to issue and their respective specifications. The Prepaid Card Rules, which establish the baseline requirements for providing these services, necessitate that banks take proactive measures to effectively manage the associated risks.

Consumer finance companies, on the other hand, are also integral to the landscape of Prepaid Card services. They are required to promptly submit a copy of their contractual agreements with supervising banks to the Financial Regulatory Authority (“FRA”). These contracts delineate the provision of Prepaid Card payment services to customers of non-banking financing providers and merchants, and they further outline the network of sellers and service providers offering consumer goods and services. This cooperative framework ensures the smooth operation of prepaid card services and extends their accessibility to a broader range of consumers.

2. Service Providers

  1. Service providers, as per the Prepaid Cards Rules, are organizations contracted by the bank with approval from the CBE to provide prepaid card services. To demonstrate their commitment, these organizations must deposit funds in Egyptian pounds or suitable guarantees with the bank. They may also handle cash transactions as specified (referred to as “Service Providers“). The issuing bank assigns card terminals to them, ensuring compliance with regulatory standards.
  2. The bank can engage Service Providers to offer prepaid card payment services upon CBE’s approval. The bank and Service Provider must agree on operations, ensuring they adhere to the following criteria:
    1. Compliance with CDD Procedures for Prepaid Card Service (for entities mentioned in section 3 thereof), which includes verifying card applicant identities, recording issuance applications, providing usage guidance, and handling Egyptian pounds in cash transactions.
    2. Service Providers must maintain a strong financial reputation.
    3. Service Providers are required to open a current credit account with the bank.
  3. When overseeing the outsourcing of Prepaid Card Payment Services to Service Providers, the Board of Directors and senior management play a pivotal role in ensuring the success and security of these relationships. They focus on critical aspects including risk awareness, conducting due diligence, establishing clear contracts, upholding confidentiality, ensuring compliance with regulations, facilitating audits, reporting, devising emergency plans, overseeing contract termination procedures, and reinforcing the bank’s responsibility. This comprehensive approach not only ensures the stability of outsourcing partnerships but also minimizes associated risks.
  4. Additionally, the size of transactions conducted by Service Providers is confined to the amount they have deposited in Egyptian pounds or suitable guarantees with the bank. The bank regularly assesses these deposited guarantees to ensure that Service Providers’ transactions remain within the allocated limits. This deposit can be converted into cash payments for cardholders, with Service Providers prohibited from accepting deposits from cardholders without transferring corresponding balances.
  5. Furthermore, Service Providers bear the obligation of forwarding identity verification documents of card applicants to the bank, following the stringent CDD Procedures for Prepaid Cards issued by the CBE’s Anti-Money Laundering and Counter Terrorism Financing Unit. They are also required to establish suitable locations for conducting financial transactions related to the service and maintain sufficient cash liquidity to cover anticipated cash withdrawal operations. Failure to meet these requirements may result in the enforcement of contractual terms between Service Providers and the bank.
  6. The bank, in its role of ensuring cardholder satisfaction and compliance, assumes full responsibility for cardholders and diligently oversees Service Providers’ adherence to the rules, provisions, regulations, and procedures aimed at combating money laundering and terrorism financing. Moreover, Service Providers are explicitly prohibited from transferring their agreements with the bank to third parties or assigning their contracts to others, with this requirement being clearly stipulated in the contractual arrangements.
  7. In addition to these measures, the bank is responsible for verifying that Service Providers strictly follow the Payment Card Industry Data Security Standard (PCI DSS) to secure electronic payment card data. Finally, the CBE possesses the authority to inspect any Service Providers and, if they fail to comply with CBE-issued rules, suspend or revoke their licenses.

3. Co-Branded Cards

Within the burgeoning prepaid card payment service market in Egypt, banks have seized the opportunity to collaborate with various entities to introduce co-branded cards. These strategic alliances enable them to expand their customer base and cater to diverse consumer preferences. Co-branded cards, exemplified by market leaders like the ADIB – Khazna Meeza Prepaid Card issued by Abu Dhabi Islamic Bank Egypt (ADIB) and Khazna, the Telda Mastercard Prepaid Card in partnership with Banque du Caire and Telda, and the Charge & Go Prepaid Card issued by the Commercial International Bank (CIB), have gained significant popularity. These cards offer consumers the flexibility to make online purchases and shop at global merchants, along with enticing benefits such as cashback, rewards points, easy top-up, instant payments, and round-the-clock customer support.

It’s important to note that these co-branded cards are subject to the same regulatory framework as prepaid cards, ensuring compliance with industry standards, maintaining transparency, and upholding security. While these three cards exemplify the market’s diversity, consumers should thoroughly compare the available options to choose the prepaid card that best aligns with their individual needs.


The process of prepaid card issuance in Egypt is governed by a comprehensive regulatory framework, with the Central Bank of Egypt (CBE) taking a leading role in setting and enforcing guidelines to combat money laundering and terrorism financing. A fundamental requirement for prepaid card issuance is the thorough verification of the applicant’s identity, aligning with stringent Customer Due Diligence (CDD) procedures and anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Banks are mandated to maintain meticulous documentation of card issuance, transactions, and related records, which must be securely stored for specified legal periods. Prepaid cards are exclusively issued in Egyptian Pounds (EGP), with any issuance in foreign currency requiring prior approval from the CBE. These cards are equipped with smart chips, adhere to international encryption standards (EMVCO), and necessitate the use of Personal Identification Numbers (PINs) and secure codes for transactions, ensuring a high level of security. Transaction limits, based on customer identity verification and risk assessments, are established to prevent misuse. Oversight by internal audit and compliance departments ensures the efficiency of internal controls, monitoring technical risks, AML/CTF risks, and financial transactions. Banks are also tasked with educating customers about card terms, conditions, and associated fees, promoting transparency. Additionally, banks have the option to issue co-branded cards in collaboration with other entities, subject to the same regulatory framework as standalone prepaid cards. Within this dynamic prepaid card market, co-branded cards, such as the ADIB – Khazna Meeza Prepaid Card, the Telda Mastercard Prepaid Card, and the Charge & Go Prepaid Card, have gained popularity. These strategic alliances offer consumers diverse benefits and purchasing power while adhering to the established regulatory standards. This comprehensive approach underscores the commitment to security, transparency, and legal compliance in the prepaid card issuance process in Egypt.