The Bank of Algeria has firmly opened the door to a new era of financial technology, issuing a landmark regulation that provides a clear and structured path for fintech companies to operate. Instruction N° 06–2025, dated August 17, 2025, creates a formal category for Payment Service Providers (PSPs), setting out the rules for everything from digital wallets to agent networks. For a market with immense potential for digital growth, this is the starting gun many have been waiting for.
This move is a critical pillar in Algeria’s broader strategy to modernize its economy and promote financial inclusion. By establishing a robust legal framework, the central bank is aiming to foster innovation while ensuring stability and, crucially, protecting consumers. The new rules strike a deliberate balance between encouraging new players and preventing the pitfalls of an unregulated “Wild West” environment.
Let’s break down the core components of this pivotal new law.
A Tiered Approach to Digital Wallets
At the heart of the new regulation is a pragmatic, tiered system for “payment accounts” — what consumers would recognize as digital wallets. This approach is designed to ease customers into the digital financial world with minimal friction while managing risk.
- Level 1: For balances up to 100,000 Algerian Dinars (approx. $740 USD), opening an account is straightforward, requiring only basic digital identification. This low barrier to entry is aimed squarely at capturing the unbanked and underbanked population.
- Level 2: The ceiling rises to 500,000 DZD (approx. $3,700 USD) for users who provide a scanned official ID and proof of income.
- Level 3: For the highest tier, with a balance cap of 1,000,000 DZD (approx. $7,400 USD), a video conference interview is required in addition to the Level 2 documentation.
This tiered “Know Your Customer” (KYC) model is a clever strategy. It allows PSPs to rapidly onboard a large user base for everyday transactions while applying stricter checks for larger sums, aligning with international anti-money laundering (AML) standards. Each level will also have corresponding daily transaction limits, providing another layer of security.
Safeguarding Customer Funds: The Escrow Mandate
Perhaps the most significant provision for building consumer trust is the mandatory use of “comptes de cantonnement,” or segregated escrow accounts.
Article 9 is unequivocal: all customer funds held by a PSP must be deposited into a dedicated account at a commercial bank. These funds cannot be mixed with the PSP’s own operational capital. This is a critical protection. It means that if a fintech company were to fail, its customers’ money is ring-fenced and protected from the company’s creditors.
The law requires the balance of this escrow account to match the sum of all customer payment accounts by the next business day at the latest. The Bank of Algeria will monitor these accounts and can even require a PSP to open multiple escrow accounts depending on its risk profile, ensuring that user funds remain secure at all times.
Expanding Reach Through Agent Networks
Acknowledging Algeria’s vast geography and the importance of cash in many communities, the regulation formally empowers PSPs to appoint payment service agents. This model, successful in many emerging markets, allows fintechs to leverage existing small businesses — local shops, post offices, etc. — as human ATMs for cash deposits and withdrawals.
However, the responsibility remains squarely with the PSP. Article 17 makes it clear that the PSP is fully liable for all actions undertaken by its agents. They are responsible for training agents, particularly on AML procedures, monitoring their activities, and ensuring the security and traceability of all transactions. This creates a framework for rapid physical expansion without compromising regulatory oversight.
A Strong Focus on Consumer Protection
Beyond the escrow accounts, the law embeds several other consumer-centric protections:
- Mandatory Insurance: PSPs must subscribe to a bank guarantee or professional liability insurance to cover their operations. This provides an additional safety net for users in case of the provider’s failure.
- Clear Contracts: Before opening any account, a user must digitally accept a clear, comprehensive agreement outlining all fees, terms of service, and dispute resolution procedures.
- Strong Authentication: For initiating payments or any other risky actions, PSPs must implement strong customer authentication, likely meaning multi-factor authentication.
These measures are designed to build confidence in a nascent industry, assuring Algerians that using these new services is not just convenient, but also safe.
The Bottom Line
The new instruction stipulates that all services must be provided exclusively in Algerian Dinars and within the national territory, underscoring a focus on the domestic economy for now. PSPs will also be required to integrate with the national payment and clearing systems overseen by the Bank of Algeria, ensuring interoperability within the country’s financial ecosystem.
This regulation is not merely a set of rules; it is a foundational statement. The Bank of Algeria is sending a clear signal that it is serious about digital transformation. For fintech startups, this provides a clear, if challenging, roadmap to legitimacy. For international investors, it offers a degree of regulatory certainty that has been lacking. Most importantly, for the Algerian public, it promises greater access to modern, secure, and convenient financial services, potentially transforming the way people save, spend, and send money across the country. The digital race in Algeria has officially begun.
