In the United Arab Emirates, a digital wallet does not operate on a single, all-purpose licence. The Central Bank regulates the activity of holding customer money in a wallet, known as stored value, under rules that have been in force since October 2020. Separately, retail payment services such as transfers are governed by their own rules, introduced in 2021.
“The two licences cover two different things a wallet might do, and it’s worth understanding the difference,” said Ivo Bozukov, a payments industry executive who works in the digital wallet sector. “Holding a customer’s balance is one activity. Moving that money on the customer’s behalf, through a transfer, is another. A provider can hold one licence, the other, or both, depending on what it actually offers.”
That distinction explains why some UAE wallet providers hold both licences: the two regimes cover two different activities, and a provider is authorised for the activities it actually carries out.
A Growing Number of Licensed Providers
The number of licensed providers under both regimes has grown steadily. By the end of 2025, the UAE Central Bank had licensed 16 wallet providers under the stored value rules and 30 retail payment service providers, up from 13 and 23 respectively a year earlier.
“That growth tells you something about how the market has developed,” Ivo Bozukov said. “More licensed providers generally mean more choice for customers and more competition on service, though the licence itself only tells you a provider has met the Central Bank’s requirements. It doesn’t tell you which provider is the best fit for a particular customer.”
The retail payment services side of the market expanded faster than the stored value side over that year, adding seven providers against three. That difference is consistent with a market where transfer and payment services, rather than wallet balances on their own, are drawing more new entrants.
How Customer Money Is Protected
The stored value rules place specific obligations on wallet providers around how customer money is kept. Providers must keep customer funds separate from their own, holding that money in segregated accounts with licensed banks, or protecting it through a bank guarantee or insurance arrangement instead.
Those balances are required to be reconciled against the money actually held at least once a day, and providers are not permitted to treat investment returns on customer funds as a significant source of income for the business. Together, these requirements are designed to keep the money a customer has loaded into a wallet available to them, separate from the provider’s own financial position.
“For a customer, none of this is visible day to day,” Ivaylo Bozoukov said. “You don’t see the segregated account or the daily reconciliation. What you can see is whether a provider is licensed, and that licence is what tells you those protections are supposed to be in place behind the scenes.”
Managing the Pooled Float
A related requirement covers what is known as the float: the pooled total of customer money a provider is holding at any given time across all its wallet users. The Central Bank’s rules on managing and safeguarding this float set out how it can be kept, and require a provider that wants to hold part of it in low-risk assets other than cash or bank deposits to obtain the Central Bank’s prior written consent.
“The float is really just all the individual balances added together, but it needs its own set of rules because of the scale involved,” Bozoukov said. “A provider with tens of thousands of customers is effectively managing a large pool of other people’s money on an ongoing basis. Keeping that pool liquid and low-risk is what ensures any individual customer can get their balance back whenever they ask for it.”
Why the Two Regimes Fit Together
The relationship between the two sets of rules shows how digital wallets actually work in practice. Stored value rules cover the act of holding a customer’s money in a wallet balance. Retail payment rules cover what happens when that money moves, whether through a fund transfer to another person, a merchant payment, or another form of payment service.
A wallet that only lets customers store value, without moving it anywhere, would fall under the first regime alone, while one that also offers transfers needs to meet the second regime’s requirements as well, which is why some providers in the UAE hold both licences.
What the Licence Tells a Customer
For someone who’s deciding whether to trust a digital wallet with their money, the licence behind it is, in practical terms, the simplest thing to check. It shows that the Central Bank’s rules on separating customers’ funds, reconciling balances, managing the pooled float and limiting how a provider can use that money apply to the service in question.
As the number of licensed wallet and payment providers in the UAE continues to grow, that licensing framework remains how the Central Bank applies its customer protection requirements across the market. Each new entrant has the same baseline obligations to meet before it can hold or move a customer’s money.
