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DIFC Payment Service Provider License | Providing Money Services DIFC

August 22, 2021by Mohammed Rahali

Obtaining Payment Service Provider License DIFC | Providing Money Services DIFC

The DUBAI INTERNATIONAL FINANCIAL CENTER (DIFC) is one of the two Financial Free Zones within the UAE with its own civil and commercial laws, that grants financial entrepreneurs the opportunity in obtaining a Payment Service Provider License. In other jurisdictions, this DIFC Payments Service Provider license is used for Authorised Payment Institution or Electronic Money Institution. Hence, if you are looking to obtain an Authorised Payment Institution(API) or Electronic Money Institution(EMI) license in DIFC, then contact our corporate team today.

At the heart of the DIFC model is an independent risk-based regulator, the Dubai Financial Services Authority (DFSA), which grants financial licenses and regulates the activities of all banking and financial institutions in DIFC. As a financial free zone with an independent jurisdiction, DIFC has three independent authorities:

  • Dubai Financial Services Authority (DFSA);
  • Dubai International Financial center Authority (DIFCA) and;
  • DIFC Courts operating under common law;

These three authorities ensure that DIFC offers a highly professional yet business-friendly environment operating with the best practices and recognized by all the major financial centers across the world.

 

PAYMENT SERVICE PROVIDER LICENSE – PROVIDING MONEY SERVICES

An Authorised Firm providing payment services in DIFC is a firm authorized to provide money services. This firm is typically licensed to carry on one or more financial services of providing money services where the firm is:

(a) Providing Currency Exchange (currently not provided as a standalone service in the DIFC);

(b) Providing Money Transmission;

The transmission of money or monetary value, without a Payment Account being created in the name of the payer or the payee, where funds are:

(i) received from a payer for the sole purpose of transferring a corresponding amount to a payee or to another Payment Service Provider acting on behalf of the payee; or

(ii) received on behalf of, and made available to, the payee

(c) Providing or Operating a Payment Account;

Providing or operating an account held in the name of one or more Users which is used to execute Payment Transactions

(d) Executing Payment Transactions on a Payment Account provided or operated by another Person;

(e) Issuing Payment Instruments; or

Issuing a personalised device; or personalised set of procedures agreed between the User and the provider, that is used by the User to initiate a Payment Order

(f) Issuing Stored Value.

Any electronically (including magnetically) stored monetary value as represented by a claim on the issuer which is issued on receipt of funds or other assets for the purpose of making Payment Transactions, but does not include monetary value that can be used only to pay for goods or services

 

WHAT ARE THE CAPITAL REQUIREMENTS FOR A PAYMENT SERVICE PROVIDER (PSP) LICENSE?

There is a combination of base capital, risk-based capital, and expense-based capital required. This can be up to US$ 700,000 for a PSP that Issues Stored Value and up to US $200,000 for PSP that doesn’t Issue Stored Value. Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

Note that additional capital requirements may be imposed by DFSA on the review of the application.

 

WHAT ARE THE REQUIRED APPOINTMENTS FOR AN AUTHORIZED FIRM IN ADGM?

  • Directors (at least 2, preferably 3-4) – can be outsourced (NEDs).
  • Senior Executive Officer (SEO) – In-house, UAE resident (can be a Director).
  • Risk Officer (RO) – can be outsourced.
  • Finance Officer (FO) – can be outsourced (can also be an Executive Director/Senior Manager).
  • Money Laundering Reporting Officer (MLRO) – can be outsourced, UAE resident (can be a CO).
  • Compliance Officer (CO) – can be outsourced, UAE resident (can be an MLRO).

 

HOW CAN WINCORE ASSIST YOU?

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan etc.)

AUT – CORE: this form must be submitted by all applicants applying for a license to carry out one or more financial services in or from ADGM. It covers information on the applicant, its activities, prospective clients and controllers;

AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and

  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions

SEO – Senior Executive Officer

FO – Finance Officer

RO – Risk Officer

MLRO – Money Laundering Reporting Officer

CO – Compliance Officer Initiation of the entity incorporation process

  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license

 

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to obtain a Payment Service Provider License. Contact us at contact@wincoreadvisory.com OR +971 4 221 2602.

 

 

mm

Mohammed Rahali

Managing Partner | E: m.rahali@wincoreadvisory.com | M: +971 (0) 55 138 9591

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