Egypt regulatory update: Central Bank of Egypt allowing contactless payments through smartphone

  • Legal Development 13 March 2023 13 March 2023
  • Africa, Middle East

  • Technology risk

On 8 March 2023, the Central Bank of Egypt (CBE) announced new regulations intended to pave the way for ‘Tokenization’ services, enabling contactless payments through smartphone applications in Egypt (the Tokenization Regulations).

Once implemented, the Tokenization Regulations will enable consumers to register payment cards to their smartphone e-wallets to make contactless and online payments through various applications, including Apple Pay, Google Pay, Samsung Pay and other similar FinTech services. The Tokenization Regulations are designed to ensure that these services meet minimum security standards and are reliable for consumers.

What is card tokenization in payment processing?

Card tokenization is a security feature in payment processing. When a consumer makes a purchase, it replaces a consumer's sensitive card information with a one-time randomly generated number. This number is known as the "token" and is used one-time during the transaction purchase, to secure the consumer’s sensitive data against a data breach.

The card tokenization provides consumers with access to multiple payment options, including digital wallets, with the most common being Apple Pay, Google Pay, Android Pay and Buy Now Pay Later.

What update is captured under the Tokenization Regulations?

In accordance with the Regulations:

  • Issuer Banks (i.e. banks authorised by the CBE to issue cards in Egypt for use in digital or electronic transactions) are required to obtain a license from the CBE for each and every application on which the card is enabled to make payments (regardless of whether the application is owned by the bank itself, a manufacturer of mobile device, or a payment service provider).
  • Manufacturers of mobile devices or payment service providers will also be required to obtain a license from the CBE to become authorised to provide Original Equipment Manufacturer and Host Card Emulation Wallets through their own applications (using the cards issued by banks regulated in Egypt).
  • Token requester (companies which request and store tokens for payment cards) will be required to enter into an agreement with “Meeza”, in order to issue an auxiliary token when using an offshore card. “Meeza” is the nominated Egyptian electronic payment system provider for domestic transactions within Egypt, supported by the Egyptian government and regulated by the CBE.

If you would like more information, or assistance with licensing requirements, please contact us.


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