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FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.
For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.
Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.
Introduction
Attitude of the country towards modern payment services
The Central Bank of Egypt (CBE) has contributed to building different components of the National Payment System, opening new horizons in electronic fund transfer (EFT) in Egypt. The importance for moving to EFT lies in enhancing the flow of cash in the economy, hence increasing the GDP. And the importance for CBE to lead such initiatives is to ensure the trust of the users, protect consumers, regulate the market, and ensure competitive market conditions.
Furthermore, the Central Bank of Egypt has decided to launch an initiative to distribute 100,000 free POS machines to encourage online payments, especially in small stores and shops, and has launched many advertising campaigns encouraging electronic payment.
Legal affairs
Obligations and requirements to provide payment services or ancillary services described above
The payment regulations differ depending on the method of payment. In order to increase the orientation of banking services in Egypt towards reliance on technology, CBE published the regulations governing the provision of mobile payment services issued in April 2021. Banks who wish to provide a mobile payment service need to apply for a license in order to provide such services to their agents. The process for obtaining this license includes certain documentations such as the services that shall be provided under the license and a penetration test report. The CBE published the regulations governing the Technical Payment Aggregators & Payment Facilitators aiming to cope with the fast developments taking place in collection, bill payments and the payment for services, in addition to the need for the services of technical payment aggregators and payment facilitators, which can give many merchants and companies access to financial and technical services. These regulations also illustrate the appropriate means of contracting to support the deployment of e-Payment services across alternative delivery channels, which would greatly contribute to the acceptance of the different means of payment instruments by these categories of companies and merchants, and would, in turn, ensure realising safe tangible steps for all stakeholders in the field of e-Payments.
The regulations indicate that banks wishing to enter into contract with technical payment aggregators and payment facilitators shall apply to obtain CBE’s consent. The application needs to include certain documentation, among them: an application; a list of the delivery channels; detailed workflow to be followed for each delivery channels separately; a plan of the bank; as well as the technical payment aggregators and payment facilitators to enlist sub-merchants, such as, for example without limitation, delivery channels to be used, the number of sub-merchants to be contracted, and the targeted number and value of transactions to be collected; a statement indicating any case of complete or partial non-abidance of technical payment aggregators and payment facilitators by contractual regulations issued by CBE; to pass the necessary tests according to the alternative delivery channels to be used by technical payment aggregators and payment facilitator