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

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

1. 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 data breach.

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

2. What update is captured under the Regulations? In accordance with the Regulations:

  • Issuer Banks  (i.e. banks authorized by the CBE to issue cards in Egypt for use in digital or electronic transactions) will be required to obtain a license from the CBE for each and every application on which the card will be 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 such as Apple Pay, Google Pay and Samsung Pay or other).
  • Manufacturers of mobile devices or payment service providers, such as Apple Pay, Google Pay and Samsung Pay, will also be required to obtain a license from the CBE to become authorized 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, our Cairo-based team can provide assistance. For further information, please contact us.

Please visit our website at: Cairo : Clyde & Co (clydeco.com).

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