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A Detailed Guide to Obtaining a PSP License in the UAE

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As the world goes digital, so do the habits and preferences of people. People have started using online modes for making payments for various transactions. The reason is clear. Online methods of payment offer more secure, safe, and fast ways of transferring amounts. In fact, they are just a click away.


Payment service providers, who act as intermediaries between the merchants, customers, and financial institutions, are the ones who make these transactions possible. The demand for such providers is rising as online payments are being used heavily by people, especially in tech-savvy nations like the UAE.


Let’s go through the legal intricacies of obtaining PSP license UAE, the types of licensing available, and more details here.

What do payment service providers do?

Payment Service Providers, commonly known as PSPs, are third-party service providers that help entities make and receive payments through various online channels. These online channels can include card payments, net transfers, or other modes.


The fund transfers done through PSPs are often secured with the highest level of data protection and security. Compared to traditional methods, they offer more convenient and safeguarded payment options.


The demand for reliable and efficient PSPs in the UAE and Dubai is growing day by day, making a PSP license UAE a good choice for entrepreneurs.

Benefits of getting a PSP license UAE

The UAE has been at the forefront of adopting the latest technologies. The incorporation of technology has become essential in every sector, including finance. In fact, the government has launched many initiatives specifically to encourage innovative and futuristic startups.

The same holds true for PSP businesses.

Starting a money service business can be truly advantageous in a nation like the UAE, where people have made technology a part of their everyday lives. People love to buy products and services online, and businesses are actively exploring the e-commerce space. This makes the demand for online payment solutions extremely high.

Additionally, by starting a business in the UAE, entrepreneurs can save significantly on income due to the country’s liberal tax policies. There are thriving and modern free zones in the UAE like ADGM and DIFC, where businesses can establish themselves and access a wide global market from there. Lastly, not to forget how easy it is to start a business in Dubai, and how great it feels to operate at the center of development with the latest infrastructural facilities. All these points, clarify why obtaining a PSP license UAE can be worth it.

Types of PSP licenses in UAE

For those who want to operate as payment service provider in UAE, getting a trade license is mandatory. Here are the types of PSP license in UAE that one get:

1. For Mainland 

Interested entrepreneurs can get a PSP license in UAE mainland as well. Here are the categories they can apply for:

A: Retail payment service license:


Under this license, 9 kinds of digital payment services can be provided, as has been decided by the Central Bank. Based on the activities, there are four subtypes of this license:

Category IV license: Issued for payment initiation services and payment account information services. Initial capital requirement of minimum AED 100,000 is needed irrespective of monthly average transaction value.

Category III license: Issued for activities including payment account issuance services, payment instrument issuance services, merchant acquiring services, payment aggregation services, and domestic fund transfer services. In this license, a minimum initial capital requirement of AED 1 million with monthly average transaction value of AED 10 million or above or at least AED 500,000 with monthly average transaction value of less than AED 10 million, is needed.

Category II license: Issued for offering one or more of the activities covered under Category III license along with cross-border fund transfer services. For this license, a minimum initial capital requirement of AED 2 million is needed for a monthly average transaction value of AED 10 million or above, or at least AED 1 million for a monthly average transaction value of less than AED 10 million.

Category I:
Issued for providing one or more activities covered under Category II license plus payment token services. For this license, an initial capital requirement would be AED 2 million for a monthly average transaction value of AED 1.5 million or more, or it could be AED 1.5 million with a maximum monthly transaction value of AED 10 million.

B. Stored facility value license:

For offering stored value facilities such as e-wallet services, the Central Bank of UAE offers an SVF license. Under this license, activities that can be provided include:

  • Device-based stored value facility, such as prepaid cards and smartwatches.
  • Non-device-based stored value facility, like web-based payment platforms.
  • Single-purpose stored value facility, like closed-loop facilities.

2. For Freezone

For freezone business setup, the following offer the PSP licenses:

DIFC freezone:

Dubai Internation Financial Center, DIFC, is a famous financial hub in the UAE. It offers the following types of PSP licenses:

  • Category 3C license for offering wallet services.
  • Category 3D license for issuance of payment accounts and payment instruments and facilitation of payment transactions.
  • Category 4 license for offering money transmission services.

ADGM freezone:

Abu Dhabi Global Market (ADGM) is another famous financial hub offering support to businesses in the sector. It offers a license called the Category 3C license, which is issued by the Financial Services Regulatory Authority. Under this license, businesses can offer various services such as issuing payment instruments, money transmission services, etc.

Process to get PSP license in UAE

Here are the steps to apply for a PSP license UAE:

1. Activity determination:

Start by deciding what activities you will be conducting. The activities you choose determine the type of license you must apply for.

2. Location selection:

You must choose between Dubai freezone and Dubai mainland. Both of the jurisdictions offer the PSP license and your selection would be based on your business requirements.

3. License application:

Submit the license request with the appropriate authority which would be Department of Economic Development (DED) in case of mainland or it could be the respective freezone authority. Along with license form, you must submit all the necessary documents and pay the required fees.

4. Application review:

Once you submit the license application, the authorities will review it. Usually at this stage you may also have to go through background checks and interviews.

5. License issuance:

After your license application gets successfully accepted, you will receive your PSP license UAE.

6. Conducting business:

For PSP business in UAE, it is very essential to stay complaint with all the legal requirements and changing laws. You must have proper practices and policies in place regarding the risk assessment, KYC and AML compliance, periodic reporting, etc.  

Documentation requirements for PSP license

For applying for payment service provider license UAE, you must submit the following documents to the concerned authorities:

  • Filled application form
  • Detailed business plan
  • Risk management policies
  • BOD resolution
  • Ownership structure details
  • Certified paid-up capital report
  • Articles of company or equivalent
  • AML and KYC policies

In case you are doubtful about the documentation or any legal process of license application, it is suggested to seek expert assistance from professional business consultants. 

What is the expected cost of PSP license in UAE?

You can expect to pay anywhere around USD 15,000* in freezones like DIFC for a PSP license. The cost of license varies depending on the selected jurisdiction and your business requirements.

Wrapping up!

Getting a PSP license UAE is a very profitable business opportunity, given the technological advancement of the nation, and a shift to the online world for shopping and payments. 

When starting a PSP business in Dubai, there are certain legal requirements that must be strictly met. That is why, for getting the appropriate license, along with other approvals, it is better to get expert help. Dubiz Business Setup holds expertise in helping businesses getting started in the UAE. They can help with:

  • End to end UAE company registration 
  • Business licensing 
  • Residency and golden visa application
  • Corporate bank account setup
  • Tax and accounting services
  • Business office space solutions

Book a free consultation with them today and bring your Dubai business dream to life!