PSP vs Bank: what is a Payment Service Provider?

For a long time in Algeria, there was only one option to move money: the bank. Current account, RIB, transfer, bank card — the whole machinery. With its slowness, its fees, its branches 30 minutes from your home, and a target audience that was largely urban and banked.

In 2025, the Bank of Algeria published Instruction 06-2025, which creates a new status: the Payment Service Provider (PSP). This is what allows Centeem (and other Algerian fintechs) to exist legally. But what exactly is a PSP?

1. What exactly is a bank?

A bank has 3 main missions:

• Collect deposits from the public (your salary, your savings).
• Lend that money to other clients (home loan, car loan, business financing).
• Manage payments (transfers, cards, cheques).

These 3 activities combined create an enormous risk: if everyone withdraws their money at the same time (a "bank run"), the bank cannot repay because it lent that money out. That's why banks are very heavily regulated, supervised by the Bank of Algeria, and subject to complex capital ratios (Basel III).

2. A PSP is different

A Payment Service Provider does ONLY the bank's 3rd mission: manage payments. It doesn't collect deposits, it doesn't lend money. It transmits, debits, credits, collects, withdraws.

Concretely: when you load 10,000 DZD onto Centeem, those 10,000 DZD don't "stay" at Centeem. They are ring-fenced in a dedicated bank account at our partner bank (a Bank of Algeria requirement). Centeem cannot touch them for its own operations. It's your money, separate, untouchable.

3. Why this is good news for Algeria

The PSP status changes the ecosystem for 3 reasons:

✅ Faster innovation

A bank takes 5 years to launch a mobile app because it drags along a 30-year-old legacy IT system. A PSP, on the other hand, can launch in 18-24 months with a modern technical stack. That's what enabled the rise of Revolut, Wise, N26 in Europe.

✅ More accessible to the unbanked

60% of Algerians don't have access to modern banking services. PSPs can serve them with tailored products: simplified KYC, smaller amounts, reduced fees, and above all — a smartphone is enough. No need to go to a branch.

✅ More transparent pricing

Banks have historically had opaque fee schedules (account maintenance fees, inactivity fees, transfer fees, etc.). PSPs, by modern culture and competitive pressure, display their pricing clearly. That's our commitment at Centeem: a pricing page accessible to everyone, with no hidden asterisks.

4. The 2 categories of PSP: EME and EP

Instruction 06-2025 distinguishes 2 sub-statuses:

Centeem is applying for the combined EME + EP licence, which lets us both open user accounts (EME) and provide professional payment acceptance (EP). That's what makes the "3-in-1" app possible: personal account + professional tool + acceptance for tourists.

5. What it implies on the security side

A PSP is subject to the same AML (Anti-Money Laundering) obligations as banks:

• Mandatory KYC for every user (ID document, selfie, verification).
• CTR thresholds: every transaction ≥ 1M DZD is reported automatically (Currency Transaction Report).
• STR thresholds: any suspicious activity is subject to a monthly Suspicious Transaction Report to the CTRF.
• Minimum capital of 160M DZD for EME+EP PSPs.
• Ring-fencing of all client funds in a separate bank account.

In other words: a PSP is not a "light bank", it's a serious and compliant player — just with a more focused scope of activity.

6. And where does Centeem fit in?

Centeem is in the process of obtaining its EME+EP PSP licence. Our file is complete (capital, business plan, AML framework, banking partnership for ring-fencing). We're awaiting the Bank of Algeria's deliberation to open to the general public.

In the meantime, we're building the app, testing with a private beta with volunteer users, and preparing the partner agent network across the 69 wilayas. Download the app to reserve your spot.