In brief
The Central Bank of Egypt (CBE) recently published regulations pertaining to payment cards tokenization on electronic device applications (“Tokenization Regulations“) which came into force on 8 March 2023. The Tokenization Regulations will effectively allow for contactless payments through mobile applications including some operated by major mobile payment service providers. The said regulations impose regulatory and licensing requirements on banks and non-bank parties participating in the provision of tokenization services for payment cards.
Key takeaways
- The Tokenization Regulations come as part of a series of initiatives spearheaded by the CBE to strengthen the infrastructure of the banking sector and promote the use of electronic payment tools by customers in their day-to-day transactions. By applying the new system, electronic payments will be further utilized in line with the National Payment Council’s Strategy to create a cashless society in Egypt.
- They apply to all banks operating in Egypt, Token Service Providers licensed by the CBE, card issuers and card networks with regard to the provision and management of tokenized card payments via mobile smart wallets.
- The regulations specifically address payment tokenization in which a payment token is utilized throughout the entire payment transaction from the point of sale to the transfer of paid amounts to the acquirer bank.
- They also lay out the process issuing banks need to follow to obtain the relevant licenses from the CBE to provide tokenization services.
- The issuance of the Tokenization Regulations comes at the heels of a series of regulations which opened up the Egyptian market to payment service providers. They further extend the field to local and international, new and established fintech companies seeking to enter the Egyptian market and diversify the range and efficiency of payment solutions available to Egyptian customers, in line with the continued efforts and initiatives led by the Egyptian government to promote financial inclusion.
For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.
