What the UAE’s 2025 Licensing and Data-Sharing Regime Means for Wallets, Merchants & Fintechs
TLDR
The Central Bank of the UAE (CBUAE) is tightening oversight of the region’s fast-growing payments industry. With new 2025 regulations introducing updated licensing categories, data-sharing rules, and operational risk standards, fintechs, wallets, and merchants must adapt quickly. Compliance is no longer just about registration — it’s about proving resilience, security, and transparency. The UAE’s evolving framework puts emphasis on data governance, cross-border sharing, and customer authentication integrity. Ideem’s Zero-Trust Secure Module (ZSM) and Passkeys+ help institutions meet these standards through deterministic, device-bound authentication that protects data and maintains compliance while improving user experience.
The UAE’s next phase of payments regulation
The UAE has positioned itself as a global leader in digital payments and fintech adoption. With the 2025 payment regulation updates, the CBUAE is formalizing a framework that balances innovation with security. The new licensing and data-sharing regime builds on previous measures such as the Retail Payment Services and Card Scheme Regulation and the Stored Value Facilities Regulation, expanding their scope to cover a wider range of digital activities.
The goal is to ensure that every entity facilitating payment services — from wallets and BNPL platforms to gateways and merchant aggregators — operates under clear, consistent standards. Key priorities include:
- Strengthening customer protection and financial stability
- Enforcing strict operational and data security controls
- Improving oversight of third-party and cross-border data exchanges
- Enhancing transparency in how customer data is stored, processed, and shared
By clarifying responsibilities across the payment value chain, the CBUAE aims to build a more resilient and trustworthy digital financial ecosystem.
Licensing redefined for 2025
The 2025 framework expands the definition of what constitutes a payment service provider (PSP) and refines licensing tiers. Entities offering services such as tokenized wallets, merchant aggregation, or open-banking-style APIs will fall under specific supervision.
This brings greater accountability but also new obligations around:
- Capital adequacy and operational resilience — ensuring providers can sustain service disruptions.
- Cybersecurity and incident response — mandating pre-approved controls and recovery frameworks.
- Data localization — requiring sensitive financial data to remain within the UAE or approved jurisdictions.
- Cross-border reporting — aligning with GCC efforts to improve interoperability between payment systems.
For fintechs and merchants, the message is clear: compliance now extends beyond registration to active governance over data, authentication, and fraud management.
The role of data-sharing in the new regime
Data has become both the UAE’s fintech advantage and its primary regulatory concern. As wallets and payment providers expand regionally, they increasingly rely on shared customer identity, transaction, and behavioral data to improve service and fraud detection.
The CBUAE’s 2025 framework seeks to standardize and secure these exchanges through:
- Data minimization principles, limiting the scope of what can be shared.
- Explicit consent requirements, ensuring users understand how their information is used.
- APIs governed by licensed PSPs, with mandatory authentication and encryption.
These provisions bring the UAE closer to open-banking-style interoperability, but with tighter privacy safeguards. Institutions must now demonstrate not only technical capability, but also proof of how and when data moves between systems.
This is where authentication integrity becomes critical — knowing that data access originates from a trusted device, account, and user.
Device-bound authentication and compliance alignment
Under zero-trust principles, every access request — whether for a transaction, an API call, or a user login — must be verified. Device binding supports this model by linking each identity and credential to a unique, cryptographically trusted device.
In the UAE’s 2025 framework, this approach helps institutions meet multiple compliance goals simultaneously:
- Authentication assurance: verifying that only authorized devices initiate payments or data exchanges.
- Data protection: limiting exposure by reducing reliance on third-party verification networks such as SMS OTPs.
- Traceability: providing clear audit trails for regulators on authentication events.
Ideem’s ZSM and Passkeys+ operationalize this in practice. ZSM verifies the integrity of the device itself, while Passkeys+ binds credentials locally and verifies them biometrically. Together, they create a compliance-ready authentication layer that protects user data at its source.
Why compliance now drives conversion
Many fintechs fear that stricter regulations will slow innovation. In reality, compliance frameworks like the UAE’s 2025 rules can enhance competitiveness when implemented strategically.
Device-bound authentication and secure data-sharing do more than satisfy regulatory checkboxes:
- They reduce fraud by eliminating credential reuse and session hijacks.
- They improve approval rates by minimizing false declines from risk algorithms.
- They increase user trust, a critical differentiator in markets where customers expect security without friction.
In a GCC ecosystem that’s rapidly scaling across borders, institutions that invest early in compliant, adaptive authentication will attract both users and partners looking for reliability and transparency.
Preparing for 2025: what fintechs, wallets, and merchants should do now
- Assess your licensing requirements
Determine which payment category or tier you fall under in the 2025 framework and review updated capital, data, and reporting obligations. - Map your data-sharing processes
Identify where user or transaction data is shared externally and implement strict access controls. - Integrate device-bound authentication
Ensure every data exchange or payment request originates from a verified device. - Adopt zero-trust frameworks
Move from perimeter-based to continuous, event-level verification for users and APIs. - Deploy Ideem’s ZSM and Passkeys+
Implement compliance-grade authentication and secure data exchange while maintaining high conversion rates and smooth user experience.
Looking ahead
The UAE’s 2025 payment regulation signals a turning point in how the region manages digital finance. Licensing, authentication, and data-sharing are no longer siloed — they’re converging into a single, security-first compliance architecture.
For fintechs, wallets, and merchants, this is an opportunity to modernize infrastructure and prove resilience under a globally respected framework. By adopting device-bound authentication and zero-trust data governance, institutions can meet the letter of compliance while unlocking new efficiencies and user confidence.
Ideem’s Zero-Trust Secure Module and Passkeys+ offer a direct path to this future — combining regulatory readiness with conversion-friendly authentication that strengthens the GCC’s emerging digital trust economy.
Sources
- Central Bank of the UAE – Payment Regulations and Licensing Updates 2025
https://www.centralbank.ae/en/legislation-and-regulation - The Paypers – How GCC Regulation Is Reshaping Payment Licensing and Data Governance
https://thepaypers.com/expert-opinion/how-gcc-regulation-is-reshaping-payment-licensing-and-data-governance--1262254 - Arabian Business – UAE Tightens Oversight of Fintech Licensing in 2025 Update
https://www.arabianbusiness.com/industries/finance/uae-tightens-oversight-of-fintech-licensing-2025 - Finextra – Data Sharing and Compliance in the Gulf’s Fintech Future
https://www.finextra.com/blogposting/25913/data-sharing-and-compliance-in-the-gulfs-fintech-future - Ideem – Zero-Trust Secure Module and Passkeys+ for Regulatory Compliance
https://www.useideem.com/passkeys-plus