UAE’s apex bank, the Central Bank of the UAE (CBUAE) has introduced new regulations for Stored Value Facilities (SVF) in the country’s financial landscape.
Stored Value Facilities (SVF) represent mediums that allow users to store their cash digitally and use to make payments on purchases and services. Notable SVF mediums include e-wallets, pre-paid cards, gift coupons, etc.
The new regulation is expected to create a regulated ecosystem where these modes of payments can operate in a secure, sound and efficient manner.
The new initiative from the CBUAE will allow easier market access to the region’s fintech firms and other non-bank payment service providers while ensuring necessary safeguards for customers and businesses who engage in such transactions.
The new regulation will govern licensing, supervision and enforcement provisions applicable to the companies, which are licensed to provide SVF. Organizations in the domain will be provided with a one-year transitional period to become compliant with the new regulations. Firms that hold an SVF license provided under the previous regulation would be allowed to operate unhindered and can use the transitional to ensure compliance with the new regulations.
“We are confident that the new SVF regulation will strengthen the public’s confidence in the use of digital products and services and foster further development and innovation across the payments industry.
“The new regulation constitutes an important milestone in the continued development of a robust regulatory framework for stored value facilities and the digital payments industry as a whole. It is in line with the CBUAE’s objectives aimed at safeguarding the stability and integrity of the financial system and payment infrastructure in the UAE and facilitating further development of digital payments. This regulation will ensure a level playing field for market participants and will help maintain the UAE’s status as an international financial center and a leading payment hub.”