Payment agents in the UAE: what you need to know about licensing

Doing business in the United Arab Emirates (UAE) requires careful compliance with legal regulations, especially in the area of ​​payment processing. Antwort Law is ready to help you with the legal support of your business in the UAE, providing professional advice and services.

Licensing of payment agents in the UAE:

There is no license in the UAE that would allow ordinary companies to act as paying agents in transactions. This means that companies with non-financial licenses are not allowed to accept funds from customers and make payments for them. Such operations require a financial license issued by the UAE Central Bank, and the amount of capital for such a license varies depending on its category, starting at $500,000.

Licenses for payment agents:

In order to work as a payment agent in the UAE, a company must obtain a financial license. This license allows the company to legally process payments on behalf of its customers. Licenses are issued by the Central Bank of the UAE and the requirements for them can be quite strict. Requirements include:

- Minimum authorized capital, which varies by license type, but starts at $500,000.

- Compliance with financial reporting and auditing standards.

- Compliance with Anti-Money Laundering (AML) and Anti-Terrorist Financing (CFT) requirements.

Restrictions for companies with a regular license:

Banks in the UAE strictly regulate third-party payments for companies that have regular licenses. If you do not have a financial license, you will face restrictions on carrying out such transactions. However, you have two main options for solving this problem:

1. Use of a trading company

Your business can use a merchant company to process payments. In this case, the company will accept funds from customers on invoice and purchase goods from the supplier to complete the transaction. Thus, you become a full participant in the deal and have the opportunity to keep the commission. This approach allows you to integrate payment processes into the company's standard trading activities, avoiding the need to obtain an additional license.

2. Obtaining a commercial broker's license

Another option is to obtain a commercial broker's license. With this license, you will be able to match the customer and the seller, receiving a commission from either the customer or the manufacturer on the deal. This option is suitable for companies that want to act as intermediaries in transactions without having to accept and process payments themselves.

What are the advantages of working with payment agents?

Speed ​​and efficiency: Payment agents ensure fast and efficient transaction processing, allowing companies to focus on core business processes. By using payment agents, companies can reduce administrative costs and improve financial control.

Security: Payment agents usually provide a high level of security for financial transactions. This includes fraud protection, data privacy and financial security compliance.

Flexibility: payment agents can adapt their services to specific business needs, ensuring flexibility and scalability of financial transactions. This is especially important for companies planning to expand their activities or enter new markets.

Antwort Law specializes in assisting companies and payment agents in obtaining the necessary financial licenses. The company's experts will help you understand the complex requirements of UAE legislation and choose the most appropriate license option for your business.

Legal support and proper licensing are key aspects of successful business in the UAE. By contacting our team, you will receive truly professional assistance and advice that will help you avoid complications and focus on the development of your business. The company's specialists are always ready to help you on this difficult but promising path.

Olena Deilid

Junior Legal Secretary