The Central Bank of Egypt (CBE) has introduced a sweeping overhaul of its regulatory framework for digital payments with the issuance of the Licensing and Registration Rules for Payment System Operators and Payment Service Providers in June 2025. This reform comes as Egypt accelerates its shift toward a cashless economy, offering greater clarity for startups and established financial players alike.
These rules are now the definitive framework governing how fintech companies can operate payment systems, deliver payment services, and integrate with the broader Egyptian financial ecosystem.
This article breaks down the CBE’s framework into practical, actionable steps for fintech startups and founders navigating Egypt’s regulated payment sector.
1. Entities Requiring Licensing
A. Payment Institutions (Domestic & Foreign)
Any natural or legal person (individual or company) operating a payment system or providing payment services in Egypt must obtain a CBE license. This includes:
- Payment Service Providers (PSPs) — Companies offering services like money transfers, e-wallets, payment processing, and electronic money issuance.
- Payment System Operators (PSOs) — Entities managing infrastructure for clearing/settling transactions (e.g., card networks, instant payment systems).
- Foreign PSPs — Firms outside Egypt offering services to Egyptian residents must also register.
B. Exemptions
Some activities are excluded from licensing, such as:
- Cash transactions (direct payer-to-beneficiary exchanges without intermediaries).
- Securities settlement systems (e.g., stock exchanges, central depositories).
- Government payroll systems (if they don’t involve third-party payments).
2. Types of Licenses & Capital Requirements
A. The CBE classifies licenses based on transaction volume and service type:
| License Type | Scope of Services | Minimum Capital (EGP) |
|---|---|---|
| Category A Payment Service Provider | All payment services (except payment order creation & account info services) with avg. monthly transactions ≤ EGP 750M | 30,000,000 (USD600,000) |
| Category B Payment Service Provider | All payment services with avg. monthly transactions > EGP 750M | 10,000,000 (USD200,000) |
| Payment Order Creation / Account Info Service Provider | Only payment order creation or account info services | 20,000,000 (USD400,000) |
| Payment System Operator | Operating payment systems (Must comply with PFMI principles (risk management, settlement finality) | 500,000,000 (USD10 Million) |
B. Banks Offering Payment Services
- Do not need a separate PSP license but must obtain prior CBE approval.
- Must follow AML, cybersecurity, and outsourcing rules.
C. Foreign Payment Institutions Serving Egyptian Residents
Foreign PSPs must:
- Be licensed in their home country.
- Have 2+ years of operational experience.
- Appoint a local representative (approved by CBE).
- Submit compliance documents equivalent to domestic PSPs.
3. Licensing Process
Step 1: Prior Approval for Establishment
Before incorporation, applicants must:
- Submit a request to the CBE (valid for 6 months, extendable).
- Provide:
- Draft articles of association.
- Business plan (3-year financial projections).
- Ownership structure (identifying ultimate beneficiaries).
Step 2: Full License Application
After incorporation, firms must submit:
- Operational documents:
- AML/CFT policies.
- IT security & business continuity plans.
- Outsourcing agreements (if applicable).
2. Financial documents:
- Audited financial statements (if already operating).
- Proof of capital adequacy.
3. Key personnel disclosures:
- CVs of board members & executives.
- Fit-and-proper declarations.
Licensing Timeline and Process
| Stage | Timeline |
|---|---|
| Initial Review | Within 90 days of application completion |
| Conditional Licensing | 6 months, extendable once |
| Publication of Approval | 10 working days on CBE website |
| Failure to Submit Amendments | Application rejection within 30 days |
Step 3: Post-Licensing Requirements
- Submit a financial guarantee (2% of capital, irrevocable bank guarantee).
- Pay inspection fees (ranging from EGP 100,000–500,000).
- Undergo annual audits.
4. Ongoing Compliance Obligations
A. Reporting Changes to the CBE
- Prior approval required for:
- Changes in ownership (>10% stake).
- New branches/subsidiaries.
- Major outsourcing agreements.
- Immediate reporting (within 2 working days) for:
- Cybersecurity breaches.
- Fraud or AML violations,
B. License Amendments
Required if:
- Adding/removing services.
- Changing transaction volume classification (e.g., moving from Category B to A).
- Follows the same process as initial licensing.
C. Penalties for Non-Compliance
| Fee Type | Amount (EGP) |
|---|---|
| License Application Fee | 1,000–100,000 per service |
| Inspection Fee (Post-Licensing) | 100,000–500,000 |
| Annual Audit Fee | 0.02% of avg. monthly positions (max EGP 200,000) |
| Financial Guarantee | 2% of issued capital |
Penalties: Non-compliance may lead to fines, suspension, or license cancellation.
5. Transitional Rules for Existing Firms
- Existing PSPs must apply for a license within 12 months.
- Non-compliant firms must cease operations.
The Bottom Line
Egypt’s 2025 Payment Licensing Rules introduce a structured yet stringent framework for fintech firms. Key takeaways:
- Licensing is mandatory for most digital payment services.
- Capital requirements vary by service type and transaction volume.
- Compliance is ongoing (reporting, audits, cybersecurity).
Egypt’s updated regulatory framework marks a decisive shift toward rigorous governance and market stability in the fintech and payments sector. For startups, compliance is not merely a formality — it is a gateway to market legitimacy, customer trust, and sustained growth.
While the licensing regime introduces significant procedural demands, it simultaneously creates an environment that rewards well-managed, forward-looking fintech businesses.
For founders and fintech executives, early preparation, strong documentation, and proactive compliance will be the defining factors between market success and regulatory friction.
