Algeria’s Fintech Era Begins as Telecom Giant Djezzy Secures Country’s First PSP License

Algeria’s central bank has granted its first authorization for a non-bank payment provider, marking a formal step toward establishing a regulated financial technology sector in North Africa’s largest economy.

The Monetary and Banking Council (Conseil Monétaire et Bancaire), chaired by the Governor of the Bank of Algeria, approved the creation of Djezzy Payment Services as a Payment Services Provider (PSP). The entity is a dedicated subsidiary of Optimum Telecom Algeria (Djezzy), the country’s second-largest mobile operator, which has been wholly state-owned since the Fonds National d’Investissement (FNI) completed its buyout of Veon’s stake in 2022.

The decision represents the inaugural implementation of Regulation N° 25–02, framed under Law 23–09 on Monetary and Banking Law. The policy framework was designed to diversify payment instruments, integrate informal capital into the formal banking system, and broaden financial access across a population that remains heavily reliant on physical cash.

Two-Stage Licensing Process

The authorization granted to Djezzy Payment Services is an initial establishment approval (autorisation de constitution). Under the terms set by the Bank of Algeria, the company has up to 12 months from the date of notification to set up its operational structure, technical infrastructure, and risk governance before applying for a final operating licence (agrément).

Once fully licensed, Djezzy Payment Services will be permitted to issue digital wallets, process electronic transactions, and operate agent-based financial networks without functioning as a full-service commercial bank.

Industry analysts note that awarding the first establishment permit to a state-controlled mobile operator aligns with Algiers’ deliberate approach to financial sector reform. With an established subscriber base and national network coverage, telecom subsidiaries possess the capital and infrastructure required to navigate new compliance requirements.

Core Provisions of Instruction N° 06–2025

The licensing decision follows the central bank’s release of Instruction N° 06–2025, which details the technical and operational standards required of non-bank financial intermediaries.

┌─────────────────────────────────────────────────────────┐
       │             Instruction N° 06–2025 Framework            │
       └────────────────────────────┬────────────────────────────┘
                                    │
         ┌──────────────────────────┼──────────────────────────┐
         ▼                          ▼                          ▼
┌──────────────────┐       ┌──────────────────┐       ┌──────────────────┐
│  Tiered Wallets  │       │                 Fund Safeguards  │       │  Agent Networks  │
│  (Level 1 - 3)   │       │                    (Escrow/DZD)    │       │ (PSP Liability)  │
└──────────────────┘       └──────────────────┘       └──────────────────┘

The regulation establishes several core mandates:

Tiered Customer Verification (KYC): To balance onboarding efficiency with financial integrity, digital wallets are divided into three balance tiers:
Level 1 (Up to 100,000 DZD / ~$740): Requires basic digital identity verification, targeted at onboarding unbanked users.
Level 2 (Up to 500,000 DZD / ~$3,700): Requires formal identity documentation and proof of income.
Level 3 (Up to 1,000,000 DZD / ~$7,400): Requires document submission alongside remote video verification.
Segregated Escrow Accounts (Comptes de Cantonnement): Under Article 9, PSPs must place all customer funds into dedicated escrow accounts held at commercial banks. These assets must remain strictly ring-fenced from operational funds, with balances reconciled against total customer liabilities by the next business day.
Agent Network Liabilities: PSPs may partner with local merchants, postal outlets, and retail stores to serve as physical cash-in and cash-out points. However, Article 17 assigns full legal and regulatory liability to the PSP for the compliance, training, and anti-money laundering (AML) protocols of its agent network.
Domestic Currency Operations: All transactions, settlements, and stored values must be denominated strictly in Algerian Dinars (DZD) and carried out within national borders. PSP platforms are required to integrate directly into national clearing and settlement systems overseen by the central bank.

Strategic Implications for the Market

Algeria’s banking sector has historically been dominated by large state-owned commercial banks, with low credit card penetration and a sizeable informal economy. By contrast, mobile network coverage extends across more than 95% of the population, providing an alternative channel for transaction banking.

While the entry of a state-owned operator sets the baseline, the clear regulatory standards established in Instruction N° 06–2025 offer independent technology startups and foreign investors a predictable framework for entry.

The primary operational challenge for new PSPs will involve converting cash-heavy retail trade into digital wallet usage, while adhering to strict daily transaction limits and multi-factor authentication requirements. Whether independent fintech startups can raise the necessary capital to meet the central bank’s escrow and compliance demands remains an open question for the market’s evolution.

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