In June 2025, five years after the enactment of Banking Law No. 194 of 2020, the Central Bank of Egypt has issued the official rules governing the licensing and registration of payment system operators (PSOs) and payment service providers (PSPs). These rules are crucial, as they give effect to the general provisions of the Banking Law relating to PSOs and PSPs and are implemented within the framework of the Payment Systems and Services Oversight Policy issued in March 2024.
The rules provide for a transition period of 12 months, ending in June 2026, for PSOs and PSPs to regularize their situation and obtain the adequate license.
These rules are expected to mark a significant step in reinforcing the integrity and efficiency of Egypt’s financial infrastructure, particularly in light of the rapid expansion of digital payments and fintech solutions.
Key Objectives and Legal Foundation
The rules are designed to ensure that all entities operating within the Egyptian payments ecosystem, whether locally established or operating cross-border for Egyptian residents, are properly licensed, supervised, and aligned with national interests and international standards.
Scope of Application
The new rules apply to both individuals and legal entities, whether based in Egypt or abroad, that engage in any activity involving payment services directed at residents of Egypt.
The regulated activities include operating payment systems, providing payment services such as cash deposits and withdrawals, transferring funds to and from payment accounts, offering various payment instruments and acceptance channels (including electronic acceptance tools), issuing and managing electronic payment instruments, processing electronic payment transactions, remittance services for inbound and outbound transfers, as well as services related to the creation and management of payment orders and electronic money issuance.
Excluded from the scope of application are cash payments executed directly between payer and payee without intermediaries, payments involving tourist networks or paper vouchers, payment transactions arising from services offered by mobile network operators unrelated to electronic payments, additional services provided by payment systems that do not involve collecting funds for clients, and operations related to clearing, settlement, or custody of securities and financial instruments, including services performed by central banks or government entities acting in their official capacity.
Categories of Licensed Entities
The new rules distinguish between three types of entities as follows:
- Payment Service Providers (PSPs) — Category A: Entities licensed to provide all payment services, with an average monthly value of executed payment transactions exceeding EGP 750 million.
- Payment Service Providers (PSPs) — Category B: Entities licensed to provide all payment services except for the initiation of payment orders and payment account information service with an average monthly value of executed payment transactions amounting to EGP 750 million or less.
- Payment System Operators (PSOs): Entities responsible for running infrastructure that enables clearing, settlement, or routing of transactions. Further, such entities shall be licensed by the Board of Directors of the Central Bank to operate a payment system.
The rules allow banks to exercise the same activities, subject to prior authorization from the Central Bank. However, banks remain exempted from applying for a special license.
Licensing Requirements
After obtaining the green light from the Central Bank payment institutions can proceed with applying for the PSO or the PSP license. To do that, the Central Bank has laid out a clear set of requirements, most importantly: a payment institution must be an Egyptian joint stock company exclusively dedicated to payment services. Its minimum capital shall be at least:
- EGP 30 million, for payment services providers of category A;
- EGP 10 million, for payment services providers of category B;
- EGP 500 thousand, for payment system operators;
- EGP 20 million, for account Information service provider and/or payment initiation service provider.
Further requirements include technical expertise, reputation, full disclosure of the ownership structure and UBOs, and collaborating with a bank.
Central Bank’s Supervisory Powers
The Central Bank retains broad authority to:
- Amend, suspend, or revoke licenses;
- Impose administrative penalties;
- Mandate disclosures on material changes to business operations or ownership;
- Enforce capital adequacy and guarantee fund requirements.
Of note, any suspension or cancellation of the license, whether due to regulatory breaches, inactivity, or failure to comply with economic policy objectives, must be preceded by clear procedures. Additionally, the suspension or cancellation decision shall be published in the official gazette and the Central Bank’s official website.
Foreign Payment Institutions Operating in Egypt
Foreign payment institutions seeking to operate payment systems or provide payment services to residents of Egypt from abroad must obtain a license from the Central Bank of Egypt. To qualify, such entities must either fall under regulatory oversight in their home jurisdiction that adheres to standards equivalent to the Principles for Financial Market Infrastructures (PFMI) or demonstrate to the CBE that they maintain a comparable risk management framework.
Additionally, these institutions are subject to the same licensing requirements and procedures as domestic entities and benefit from the same transitional period of 12 months, ending in June 2026.
Implications for Market Players
The new rules reflect the Central Bank’s commitment to fostering a robust and secure payments ecosystem while creating a level playing field for emerging fintech providers and incumbents alike. They also align Egypt’s financial services regime more closely with global standards, particularly the Principles for Financial Market Infrastructure standards (PFMI).
Given the increasing demand for cashless solutions across sectors from e-commerce to government disbursements, the rules offer a clear roadmap for responsible innovation and operational resilience.
