Yesterday, the Central Bank of the Emirates issued a new system for stored value facilities, as part of its efforts to ensure that the stored value facilities products and services operate in a safe, sound and effective manner in the country.
Pointing to his efforts to facilitate the access of financial technology companies and other non-bank payment service providers to the local market more easily, while continuing to protect clients’ funds and ensure proper workflow, in addition to supporting the development of payment products and services.
What is meant by stored value facilities, according to the definition of the Central Bank in the previous system, are non-cash facilities in electronic or magnetic form that are purchased by the user, and used as a means to pay the value of goods and services.
His Excellency Abdul Hamid Muhammad Saeed Al-Ahmadi, Governor of the Central Bank, said: We are confident that the new system of stored value facilities will enhance public confidence in the use of digital products and services and support further development and innovation in the field of payments.
The new system is an important achievement in the continuous development of a robust regulatory framework for stored value facilities and for the digital payments sector as a whole. It is also in line with the Central Bank’s goals aimed at protecting the stability and integrity of the UAE’s financial system and payment infrastructure and facilitating the further development of digital payments. This system will guarantee equal opportunities for market participants, which will contribute to maintaining the UAE’s well-established position as a global financial center and a leading payment center. ”
The Central Bank confirmed, in a circular yesterday to banks, of which the “economic statement” obtained a copy, that the new system applies to all entities that wish to provide facilities for stored values in the country, as it replaces the existing “supervisory framework for stored values and electronic payment systems”. Taking into account technological developments and the rapid growth of stored value services, the scope of this system also includes licensing and supervision and enforcement provisions applicable to companies licensed to provide stored value facilities.
Bankers and experts in digital technology told Al-Bayan Al-Eqtisad that the aim of the previous regulatory framework for stored values and electronic payments in the country that the UAE was unique to in comparison to the rest of the Arab countries is to facilitate the application of digital payments in an effective and safe manner, and to enable the supervisory authorities to keep pace with and absorb Digital payment transactions, while ensuring the highest levels of consumer protection and financial stability opportunities.
They indicated that the new system will enhance the continuous protection and stability of the payment system in the country, provide convenient access to available digital payment services, provide coverage for all customer segments in the country, in addition to pushing innovation and creating added value in digital payment and effectively responding to market requirements. Encouraging competition in the digital payment sector.
Banking expert Ahmed Youssef said that the new system comes in line with the government’s plans for the next fifty years to move towards the new economy based on knowledge and smart technology, noting that there is great interest from the Central Bank for the continuous development of the banking sector due to its great contribution to the national economy and therefore the development of frameworks. Related to technology in this field, which contributes to strengthening the position of the sector, and gives greater confidence to customers.
He explained that the new system will provide a greater scope for companies to apply for licensing and provide stored value facilities to facilitate the access of financial technology companies and other non-bank payment service providers to the local market more easily.
For his part, a digital technology expert, Dr. Muhammad al-Feki, a lecturer at Al-Dar University College in Dubai, said that the new system will work to regulate the work of stored values and electronic payment processes, which are often developed by specialized institutions outside the financial sector, and will also enhance the emergence of digital payment systems And also its services and products.
Al-Fiqi added that digital technology greatly facilitates the work of the banking sector, as all banking transactions are currently via the Internet and smartphones through dedicated applications, allowing services and products to be provided to customers easily and easily, as well as ensuring the protection of customers’ funds.
The new system allows a wider scope for companies to apply for licensing and provide stored value facilities in the UAE, and at the same time introduces a modified set of measures to protect clients’ funds, enhance governance and operational flexibility, and existing license holders can continue to work under the framework The previous supervisory system, without violating the provisions of this system, as they will have a transition period of one year to comply with the new requirements, which will start from the date of entry into force of the system.
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