Egypt’s central bank has given the green light to licenses that will let merchants accept contactless payments from mobile phones.
Reuters reported the announcement Sunday (Sept. 26), noting that the bank did not say how soon the new system will go into effect or which businesses would be eligible for the licenses.
The story notes that new laws and changes in regulations in Egypt, the most populous nation in the Arab world, have led to a surge in FinTech investments, while also changing the way the country’s mostly unbanked residents conduct business.
As reported last year, Egypt passed its Data Protection Law in July of 2020. The rule is designed to create new guidelines for how businesses in Egypt can process and store customer data digitally and is designed to spark the growth of online banking in the market.
The law takes partial inspiration from the General Data Protection Regulation (GDPR) in the EU, in that it imposes penalties on companies that don’t stick to these online privacy rules. However, Egyptian law only concerns digital and electronic data storage, compared to the EU rule which takes a broader approach to the storage of all consumer info.
More recently, Egypt passed a law allowing the central bank to give banking licenses to FinTech companies. Another piece of proposed legislation — due to be finalized in the next few months — would govern non-banking FinTech such as nano-finance, consumer tech and insurance tech.
This change comes at a time when experts are projecting a future where a majority of buyer-supplier transactions are done virtually.
That means mobile and contactless payment options — virtual cards in particular — could play a crucial role in the payments ecosystem.
“The [pandemic] has brought attention to the need to review expenses … so having a system or tool that makes it very simple to … provide that oversight and transparency and accountability into what they are spending is crucial now,” Caleb Jenkins, leader of client accounting services for tax and accounting firm RLJ Financial, told PYMNTS. “[There is] a more real-time need to review expenses, and I am not sure that change is going away any time soon.”