Kuwait Central Bank scales oversight over e-payment providers

The circular mandates strict compliance with regulations governing the use of the Electronic Payment Services Gateway System, as part of the CBK’s efforts to optimise governance, operational oversight, and risk mitigation in
the digital payments landscape. 

This directive is part of a series of measures aimed at securing the integrity of the country’s digital financial infrastructure and strengthening public trust in electronic payment systems. 

Regulatory framework for service providers

According to the circular, service providers must:

• Assume full legal responsibility for the accuracy and validity of all documents and data uploaded through the Gateway System;

• Submit documents only by the company's legal representative (Chief Executive Officer or General Manager) or an officially authorised employee (Compliance Officer or designated staff member);

• Inform the Central Bank about resignations of authorised system users and promptly request the revocation of their access rights;

• Retain original copies of all documents, particularly the official documents issued by government entities, including criminal record certificates related to partners and leadership candidates. 

The circular demonstrates the Central Bank's commitment to improving digital oversight and ensuring legal accountability. It aims to strengthen internal controls within service providers, protect against unauthorised actions, and reduce operational and reputational risks. 

These regulations augment customer trust in the security and integrity of national e-payment systems. 

Moreover, the circular also referenced several regulatory tools, including Article 33 of the CBK’s Instructions for Regulating Electronic Payment Business issued on 14 May 2023, requiring firms to establish governance policies, procedures, and oversight mechanisms. Additionally, Article 27 mandates compliance with AML/CTF obligations under Law No. 106/2013 and relevant FATF standards.

Furthermore, CBK cited the requirements related to leadership appointment regulations from 5 July 2023 and the documentation requirements for registering partners and board members from 20 October 2024. It also instructed service providers to conduct an annual review to ensure that board members and key employees are aware of the required standards for solvency, integrity, and technical competence. Any changes must be reported immediately, along with the proper documentation to demonstrate compliance. 

With these measures, the CBK seeks to establish a secure and transparent electronic financial environment in Kuwait.