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If you want to move other people’s money in the UAE, the free zone you register in is the small decision. The large one is which Central Bank licence category you fall into, because that single choice fixes both what you are allowed to do and how much capital you must hold on day one. The Retail Payment Services and Card Schemes Regulation sets out four categories. Read from the CBUAE Rulebook on 8 August 2026.
What each category actually permits
The categories are nested. Each one down the list removes services from the one above it, which means you should pick the lowest category that still covers everything you intend to do, and no lower.
| Category | Services permitted | Dropped compared with the category above |
|---|---|---|
| I | Payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic fund transfer, cross-border fund transfer, payment token services | Nothing, this is the full set |
| II | The same, minus payment tokens | Payment token services |
| III | Payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic fund transfer | Cross-border fund transfer |
| IV | Payment initiation and payment account information only | Everything that involves holding or moving funds |
Category I carries one extra condition at application time: you must supply a list of every payment token you intend to issue. That is a design decision the Central Bank expects you to have made before you apply, not after.
Initial capital, and the AED 10 million line that moves it
Every category except the fourth has two capital figures, and which one applies to you depends on the monthly average value of your payment transactions against a threshold of AED 10 million.
| Category | Monthly average of AED 10m or above | Below AED 10m |
|---|---|---|
| I | AED 3,000,000 | AED 1,500,000 |
| II | AED 2,000,000 | AED 1,000,000 |
| III | AED 1,000,000 | AED 500,000 |
| IV | AED 100,000 regardless of volume | |
Two details decide how this applies to a business that does not exist yet. The monthly average is calculated as a moving average over the preceding three months. Where you have no such history at the point of licensing, the Central Bank uses the business plan and financial projections you submitted. Your own forecast therefore sets your capital requirement, which is a strong reason not to inflate it for effect.
You must also tell the Central Bank where the initial capital came from. Source of funds is part of the application, not an afterthought.
The rest of the application, in the order it is assessed
The Rulebook sets three conditions at the moment you submit: the legal form has to be right, the capital for your category has to be in place, and the documents named in the Central Bank application form have to be complete. Beyond licensing itself the regulation then imposes ongoing duties that are easy to underestimate at budget stage: control of controllers, a principal business test, anti-money-laundering obligations, technology risk and information security, rules on using agents and branches, outsourcing, and access to the Wage Protection System.
The Central Bank encourages an applicant’s management to meet the Licensing Division before a formal application is submitted. Taking that meeting is free and tends to be cheaper than discovering the category was wrong after filing.
Where the company sits, and why that is the easy part
Payment firms commonly incorporate in a financial free zone, and DIFC publishes its registration and licence fees openly. Do the arithmetic in the right order though: the zone fee is measured in thousands of dollars and the Central Bank capital in millions of dirhams. Choosing the zone first and discovering the capital second is the wrong way round.
Frequently asked questions
What capital do I need for a UAE payments licence?
It depends on category and volume. Category I: AED 3,000,000 at a monthly average of AED 10 million or more in payment transactions, AED 1,500,000 below that. Category II: AED 2,000,000 or AED 1,000,000. Category III: AED 1,000,000 or AED 500,000. Category IV: AED 100,000 regardless of volume.
Which CBUAE category allows payment tokens?
Only Category I. An applicant for Category I must also provide, at the time of application, a list of all payment tokens it intends to issue.
What is the difference between Category III and Category II?
Cross-border fund transfer services. Category II permits domestic and cross-border transfers along with account issuance, instrument issuance, merchant acquiring and aggregation. Category III covers the same list but domestic transfers only.
What does a Category IV licence cover?
Payment initiation services and payment account information services, and nothing else. It is the open-banking category: you initiate payments or read account data without holding or moving funds yourself. Initial capital is AED 100,000 whatever your transaction volume.
How is the AED 10 million transaction threshold measured for a new company?
As a moving average of the preceding three months. Where that data does not exist when the licence is granted, the Central Bank uses the business plan and financial projections submitted with the application, so your own forecast can determine which capital figure applies.
What are the nine retail payment services?
Payment account issuance, payment instrument issuance, merchant acquiring, payment aggregation, domestic fund transfer, cross-border fund transfer, payment token services, payment initiation and payment account information. Categories I to IV group them into four permitted bundles.
Need help scoping which category your product falls into? Browse licensing services or tell us what the product actually does.
Official references used for context in this article.
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