How To Start a Crypto Payment Gateway Company in Dubai?

About Dubai's current news and increasing demand for crypto payment gateways

Dubai is swiftly becoming a business hub for cryptocurrency and blockchain, establishing a supportive landscape for business. It aims to be the first city fully driven by blockchain in the year 2024. Launching a payment gateway business in the country presents exciting investment opportunities owing to the country’s strategic location and powerful financial infrastructure. If you are determined to start a crypto payment gateway in Dubai, you must navigate through a strict regulatory landscape that follows rigorous operational and financial requirements.

In the year, the crypto payment gateways market was valued at USD 1.2 billion. This market is anticipated to increase at a CAGR of more than 15% annually from 2024 to 2032. Businesses here are growingly adopting crypto payment gateways to streamline transactions and make them more secure. This trend is influenced by the increasing adaptation of cryptocurrencies as a mode of exchange and the requirement for various payment options in the e-commerce market. Certain companies like Crypto.com Pay and Coinbase Commerce are collaborating to establish advanced payment solutions for the financial, e-commerce, and gaming industries. These partnerships aim to improve transaction safety, efficiency, and decrease operational costs. The following guide involves important steps and considerations before you set up a crypto payment gateway in Dubai.

How will Crypto Boom in the Future?

Trends and advancements continually transform the crypto landscape in Dubai and so, the future of cryptocurrencies seems promising. Dubai is set to become a prominent player in blockchain and cryptocurrencies in the coming years. Moreover, the UAE government has employed supportive policies for the crypto industry, such as a custodial insurance product to safeguard financial organizations and their clients against potential hacks or fraud. With increasing consumers and businesses adopting cryptocurrencies, its prevalence in everyday transactions (for example peer-to-peer payments and online shopping) is anticipated to grow.

Some key factors shaping the future of cryptocurrencies here are market adoption, regulations, investment trends, and technological advancements. Leading financial institutions are starting to adopt cryptocurrencies and blockchain technology into their operations. Subsequently, it could result in a smoother integration of traditional financial solutions with digital assets.

Notwithstanding some challenges, there is immense potential for innovation and growth in the crypto landscape in Dubai. Real estate companies and airlines are now supporting payments in crypto, showing how digital assets can be useful in day-to-day transactions.

?Dubai also established VARA -the world’s first independent regulator for virtual regulators that provides businesses with a compliant and clear framework.?

Certain leading companies like Ripple are establishing their operations in Dubai and thus exploring the benefits of a supportive regulatory landscape to provide overseas payment services for both fiat and digital assets. A crypto payment gateway for gaming industry ensures exceptional security of cryptocurrency transactions. It usually comes with lower transaction fees than traditional payment processors.

What is a Crypto Payment Gateway?

A service allowing businesses to accept payment in various cryptocurrencies such as Ethereum, Bitcoin, and other digital assets is called a crypto payment gateway. It works just like traditional payment processors but rather than dealing with only fiat currencies (such as USD or EUR), it permits businesses to accept payments in cryptocurrencies like Ethereum, Bitcoin, USDT, or USDC.

Fundamentally, the gateway processes the transaction of the customer and then converts the crypto into fiat. Subsequently, it deposits the funds into the bank account of the particular business. So, merchants can easily extend their payment options; no need to manage cryptocurrency on their own.

Here are some prominent features of a crypto payment gateway:

Key Features:

• It is possible for businesses to integrate a crypto payment gateway either into their website or point-of-sale system. This integration allows the acceptance of payments in different cryptocurrencies.
• It is employed with cutting-edge security measures to secure user data and transactions against hacking and fraud.
• The gateway efficiently converts the input cryptocurrency into fiat currency (like EUR or USD) and then sends it to the bank account of the business.
• Both customers and merchants benefit from the user-friendly interface of a crypto payment gateway. The built-in plugins are available for e-commerce platforms such as Shopify, WooCommerce, etc.
• Several crypto gateways support a broad range of cryptocurrencies to provide flexibility to customers and businesses.

The benefits discussed below encourage anyone willing to start a crypto payment gateway in Dubai.

• The global reach of cryptocurrencies expands its potential customer base for businesses.
• Crypto transactions come with lower fees than other traditional payment methodologies to benefit both customers and businesses.
• Usually, cryptocurrency transactions are swiftly processed to reduce payment processing times.
• The risk of fraud is significantly reduced since the implemented blockchain technology promises transparent and secure transactions.

Let’s glance at some examples of crypto payment gateways available in Dubai:

• NOWPayments:?

It provides businesses with a comprehensive solution to accept crypto payments. The included tools can seamlessly integrate with e-commerce platforms and also accept various types of cryptocurrencies.

• Telr:?

This well-known crypto payment gateway in Dubai supports diverse payment options including cryptocurrencies. It offers efficient and safe transactions for businesses regardless of its size.

The discussed ones and other prevalent crypto gateways allow businesses to accept crypto payments and expand their customer base.

How does it work?

A crypto payment gateway employs an efficient and secure process to let customers and merchants streamline their transactions in cryptocurrencies.? Before you start a crypto payment gateway in Dubai, you must know how it works.

Crypto Payment Gateway Working Explained:

All the steps involved in its working are demonstrated below:

i. Integration of crypto payment gateway

In the initial step, merchants integrate a crypto payment gateway either into –(i) a website, (ii) an e-commerce platform, or (iii) a point-of-sale system. The integration involves the usage of plugins, API keys, or other integration tools supported by the gateway service. To begin accepting payments, the merchant sets up an account with the crypto payment gateway provider.

ii. Payment Initiation

The customer chooses cryptocurrency as a payment mode during checkout. Subsequently, the payment gateway makes a unique payment address to support the transaction. Moreover, it generates an invoice mentioning the amount to be paid in the selected cryptocurrency, the timeframe for completing the particular transaction, and the payment address (either alphanumeric string or QR code).

iii. Processing of transaction

To complete the payment, the customer transfers the stated amount of cryptocurrency to the payment address via their crypto wallet. During the process, the blockchain technology guarantees that the transaction is recorded and authenticated. To ensure the transaction is legit, the gateway awaits confirmations from the blockchain network. Although the number of required transactions can vary, it usually ranges from 1 to 6.

iv. Currency conversion

This step is optional and needs to be performed only if the merchant wants to make payments in fiat currency such as EUR, USD, etc. The crypto gateway can automatically convert the input cryptocurrency into the required fiat currency. So, the merchant stays protected against cryptocurrency volatility. Instead, the merchant can opt for accepting and holding the obtained cryptocurrency amount without conversion.

v. Transfer of funds

After confirmation of the transaction and after it is converted, the gateway transfers funds to the crypto wallet or bank account of the merchant’s bank account. Note that the crypto gateway deducts any valid transaction fees and then finally transfers the funds.

vi. Data Logging

As a part of record keeping, both the customer and the merchant can see the transaction details in their dashboards. The details they can see are the payment amount, transaction ID, date, and confirmation status. For record-keeping and any accounting purposes, the crypto payment gateway in Dubai provides invoices and digital receipts.

Why Dubai is the best option to establish your payment gateway company?

Dubai presents a plethora of advantages when it comes to setting up a payment gateway company. This is why, it has become an ideal destination for such ventures. Here are some of the key factors justifying the reasons to establish a crypto payment gateway in Dubai:

• Strategic location
• Business-supportive environment
• Cutting-edge infrastructure
• Developing digital economy
• Talented professionals?

Now let’s understand in detail the roles of these factors in making Dubai an enticing place for setting up a crypto payment gateway company.

i. Strategic location:

Being strategically located at the intersection of Asia, Europe, and Africa makes it a leading destination for global business operations.

ii. Business-supportive environment

The policies implemented by the UAE government support the development of the digital economy like cryptocurrencies and the VARA (Virtual Assets Regulatory Authority). The business-conducive environment entices many businesses willing to start a crypto payment gateway in Dubai.

iii. Access to markets:?

The proximity to major markets fosters easy access to a diverse customer base and business partners.

iv. Advanced technological infrastructure:

Dubai features cutting-edge technological infrastructure that supports efficient telecommunications networks and high-speed internet. These features streamline the operations of the payment gateway.

v. Ease of conducting business:

The city ranks high in the ease of doing business. The streamlined process makes it convenient for establishing and operating businesses.

vi. Security standards and compliance:

Due to high-security standards and compliance set by international regulations, payment gateway companies here benefit from reliable and safe transactions. The clear-cut regulatory guidelines offer a stable environment that fosters business growth and also streamlines their operations.

Other responsible factors:

• The country’s e-commerce market is swiftly growing; the demand for efficient and secure payment solutions is growing.
• The digital payments market is anticipated to perceive substantial growth, further strengthening the need for authentic payment gateways.
• The entrepreneurial environment of the city fosters growth and innovation. So, it has become an ideal spot for startups and even established companies.
• Dubai brings in a proficient workforce from all over the world. So, if you start a payment gateway company here, it will gain access to a diverse and skilled workforce.

Which is the best location in Dubai to start a crypto payment gateway?

Selecting the best location to establish your crypto payment gateway in Dubai depends on several factors like infrastructure, vicinity to financial hubs, access to talent, etc. Some of the top locations to flourish your crypto payment gateway business in the city are:

i. Downtown Dubai:?

It comprises several tech companies and financial institutions. It is prestigious for its dynamic business environment, seamless connectivity, and access to talented professionals.

ii. Business Bay:

Well-known for its vicinity to leading business districts and contemporary office spaces, this area offers a business-friendly environment for tech startups and financial services firms.

iii. Dubai International Financial Centre (DIFC):?

This financial hub offers efficient infrastructure to flourish financial services. It provides smooth access to a broad network of financial professionals and also supports a favorable regulatory environment.

iv. Sheikh Zayed Road:?

The region is well-known for its commercial activities, decent connectivity, and smooth access to diverse business services and infrastructure.

v. Jumeirah Lakes Towers (JLT):?

JLT provides a wide range of office spaces and amenities. The area is quite developing and conducive for businesses, including those prevalent in the fintech sector.

Note that each of these areas comes with unique benefits, so the choice depends on your preferences and business needs.

Mainland or free zone: Where to set up a payment gateway company in the UAE?

One of the common confusing questions before setting up a payment gateway company in this country is whether to establish it in the mainland or a free zone. It depends on your business goals and needs. Let’s glance at the key characteristics of each of these options:

Mainland

• The latest regulations permit 100% foreign ownership for some specific business activities.
• Mainland companies can independently operate in the UAE and carry out business with international and local clients.
• Before setting up a payment gateway company in the mainland UAE, the company must comply with UAE laws and regulations, and obtain required licenses and permits.
• Securing physical office space is required.

Free Zone

• A free zone in the UAE provides 100% foreign ownership; no need for a local sponsor.
• These zones offer tax exemptions and many other financial incentives.
• It is straightforward to set up a payment gateway company in a free zone because it works under its own regulatory framework.
• Many free zones permit virtual offices to decrease the need for physical office space.
• The market access for free zone companies is restricted to the particular free zone only. A local agent is required to conduct business outside the zone.

Which one to choose: Mainland or Free Zone?

A crypto payment gateway company’s operations involve handling financial transactions and compliance with robust security measures. So, setting it up in a free zone can be more beneficial.? In UAE, certain free zones like Dubai Multi Commodities Centre (DMCC) and Dubai International Financial Centre (DIFC) provide a business-friendly environment for technology companies and financial services.

The choice between the two depends on your business requirements, target market, and your business growth strategy. You can get in touch with a business advisor to get guidance depending on your business needs.

How to set up a payment gateway company in the UAE?

Following these steps streamline the process of setting up a payment gateway company in the UAE.

Step by Step process in detail:

Step-1: Choose a business structure

The foremost step in the easy process to setup a crypto payment gateway company in Dubai is to choose between the mainland or the free zone. Setting up a crypto payment gateway in the mainland demands you to have 100% foreign ownership to accomplish certain business activities. Free zones provide 100% foreign ownership and don’t need a local sponsor.

Step-2: Choose a location

You must choose a location based on your chosen business structure. If you opt for mainland then select a strategic location with smooth access to financial hubs and infrastructure. If you opt for a free zone business structure, you can consider free zones like DMCC or DIFC to ensure a business-supportive environment for financial services.

Step-3: Business name registration

If you choose a mainland business structure then you must register your business with the DED (Department of Economic Development) and get the necessary licenses. If you opt for a free zone business structure then you must register the business with the free zone authority and get a trade license.

Step-4: Obtain required licenses

The next step is to apply for a payment gateway license from the applicable regulatory authority (for example VARA for crypto-related services). Based on your business activities (like financial services, e-commerce, etc.), you may require additional licenses. Make sure to comply with financial regulations. Get required licenses for payment services, transactions, and allotting payment instruments.

Step-5: Setting up office space

For company setup in the Mainland, you must secure physical office space in a commercial area. Physical office space is not required in the free zone option because many free zones provide virtual office options.

Step-6: Development of technology infrastructure

This step suggests choosing an authentic payment gateway platform or creating your own. Also, you need to employ strong security measures to safeguard customer data and transactions.

Step-7: Setup bank accounts

Now you must open business bank accounts with payment processors to manage funds and transactions.

Step-8: Ensure regulatory compliance

Make sure to conform to the UAE laws and regulations, as well as data protection and financial protocols. It is necessary to implement Anti-Money Laundering (AML) and Know Your Customer (KYC) to avoid fraud. Moreover, you must prepare compliance manuals that list your company’s policies and processes for managing financial transactions, customer protection, and data security.

Step-9: Marketing

To market your company’s services, you must develop a robust online presence and brand identity. Set up marketing campaigns to attract business partners and customers.

Step-10: Launch the payment gateway

Finally, you need to launch your crypto payment gateway platform and allow transactions to happen. Make sure to provide outstanding customer support to handle any issues and establish trust.

Other requirements for setting up a payment gateway company in the UAE

Over and above the aforementioned steps, here are a few other requirements to be fulfilled before setting up a crypto payment gateway in Dubai.

• If you set up the payment gateway in a free zone then you must check the minimum capital requirements. Usually, free zones such as ADGM and DIFC come with a minimum capital requirement of approx. AED 200,000. The amount can differ as per your business activities and risk profile.
• Prepare an all-inclusive business plan that specifies your strategy, target market, and business model.
• Provide three-year revenue estimates to demonstrate your business’ sustainability.
• Stay abreast with regulatory updates and guarantee continuous adherence to UAE laws and guidelines.
• Validate that essential personnel possess the necessary qualifications and maintain a clean background.

Other jurisdictions to consider for setting up a payment gateway company in the UAE

Apart from Dubai, here are a few other jurisdictions in the UAE that allow setting up a payment gateway company in the UAE:

i. Abu Dhabi Global Market (ADGM):?

This financial-free zone is located in Abu Dhabi and provides a rigorous compliance framework and a business-supportive environment. ADGM is preferable for crypto payment gateway companies aiming to function in a secure and well-administered jurisdiction.

ii. Sharjah:?

This developing business hub emphasizes innovation and technology. It provides a conducive environment for well-established companies and startups.

iii. Ras Al Khaimah (RAK):?

RAK is known for its business-friendly policies and low setup costs. It provides a growth-oriented environment for startups and small businesses.

iv. Ajman:?

It is a small free zone offering an affordable option for setting up a crypto payment business. It offers a business-friendly regulatory environment and a broad range of business services.

Each of the aforementioned jurisdictions comes with unique characteristics, so the choice depends on your business growth strategy and needs.?

Conclusion

Dubai’s strategic location, business-supportive environment, and innovative approach towards cryptocurrencies make it a favorable destination for starting a crypto payment gateway company.? Fulfilling the relevant regulatory requirements and following the steps discussed above ensures the successful establishment of this company. By consulting a reliable business advisor, you can get guidance depending on your company’s needs and financial situation.

How will BizDaddy be your perfect partner to help in every step?

To streamline the setup process of a crypto payment gateway company in Dubai, you can consider partnering with a reliable business setup consultant. BizDaddy is one of the well-known business setup consultants in Dubai that helps you effectively navigate through each step involved in the process of establishing this kind of company in Dubai. It helps you with all the legal formalities, handles the process of acquiring necessary licenses, selects the optimal business location, launches payment processing accounts, and more. Also, it aids you in establishing a strong online presence and brand identity.

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