Algeria has taken a decisive step to modernise its payments sector. On 19 August 2025, the Bank of Algeria published a circular that establishes a licensing regime for Payment Service Providers (PSPs), effectively opening the door to domestic and diaspora-led fintech ventures. According to Launch Base Africa, the new rules create a clear playbook for payments startups, removing a long-standing barrier to digital commerce.
The circular defines three categories of PSP licences: payment initiation, account information, and merchant acquiring. Each category carries specific capital requirements—DZD 100 million (approximately USD 720 000) for payment initiation, DZD 50 million for account information, and DZD 200 million for merchant acquiring. The Bank of Algeria will process applications within 90 days, a timeline that gives entrepreneurs a predictable runway to launch.
For Algeria’s 3.5 million-strong diaspora, the move is particularly significant. Remittances reached USD 1.9 billion in 2024, yet only 12 % of those flows currently pass through formal digital channels. The new PSP licences allow startups to build low-cost, mobile-first solutions that can capture a larger share of these flows. Diaspora entrepreneurs can now incorporate in Algeria, obtain a licence, and compete with traditional banks that charge up to 8 % per transaction.
Local startups also stand to benefit. Algeria’s e-commerce market grew 32 % year-on-year in 2024 to USD 1.2 billion, but fewer than 15 % of online transactions are settled via digital wallets or cards. The PSP rules permit non-bank entities to issue e-money, tokenise cards, and integrate with international schemes such as Visa and Mastercard. This opens the door for Algerian founders to build home-grown alternatives to global platforms like PayPal, which remains blocked in the country.
The Bank of Algeria has also set a 49 % foreign-ownership cap on PSPs, ensuring that control remains in local hands. However, the regulator has carved out an exception: Algerian nationals living abroad can hold up to 100 % of a PSP if they commit to reinvesting 70 % of profits in Algeria for five years. This provision is a direct invitation to the diaspora to repatriate both capital and expertise.
Infrastructure is already in place. Algeria’s 4G coverage stands at 98 %, and smartphone penetration reached 68 % in 2024. The national interbank switch, SATIM, has been upgraded to ISO 20022 standards, enabling real-time settlement between PSPs and banks. Startups can now build on this backbone without having to invest in their own clearing networks.
The first cohort of licences is expected before the end of 2025. Entrepreneurs who apply early will gain first-mover advantage in a market where only 23 % of adults currently have a bank account. The new rules also allow PSPs to partner with telecom operators, opening the door for mobile money services that can reach the unbanked.
Regulatory sandboxes are not mentioned in the circular, but the Bank of Algeria has signalled that it will issue guidance on innovation testing in the coming months. This will give startups a controlled environment to pilot new products before full-scale launch.
Key takeaway for entrepreneurs
Algeria’s PSP licences create a regulated pathway for fintech startups to enter the payments market. Capital requirements are clear, timelines are predictable, and the diaspora can own 100 % of a PSP if they reinvest profits locally. With e-commerce growing at 32 % annually and remittances at USD 1.9 billion, the opportunity is concrete and immediate.
💡 Starting a business in Algeria? GlobalStart guides you step by step: procedures, real costs, company forms (SARL, EURL, SPA) and CNRC registration.