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Azerbaijan: fintech & payments regulation

Regulated

Central Bank of Azerbaijan supervises payment services under the 2025 Law on Payment Services and Payment Systems

Lead regulator:
Central Bank of Azerbaijan
Key law:
Law of the Republic of Azerbaijan on Payment Services and Payment Systems (2025)
Last updated:
2026-07-12

The Central Bank of Azerbaijan (CBA) exercises exclusive supervisory authority over payment services and payment systems under the 2025 Law on Payment Services and Payment Systems. All entities providing payment services or issuing electronic money must obtain a license or registration from the CBA. The regulatory framework mandates strict capital requirements, strong customer authentication, and adherence to ISO 20022 messaging standards for system participants.

The CBA actively manages the market through licensing actions, including the recent conversion of payment institution licenses to electronic money institution licenses and the revocation of licenses for non-compliant entities. The regulator has established comprehensive operational rules for the Instant Payments System (IPS), standardized settlement procedures, and defined fee ceilings to ensure market stability and efficiency.

Recent regulatory developments include the introduction of a formal Regulatory Sandbox for testing innovative financial products, standardized application forms for financial market licenses, and specific requirements for QR-based payments and cash operations. The CBA also enforces strict customer due diligence measures for wire transfers and mandates the use of secure network channels for payment initiation and account information services.

Who regulates

  • Central Bank of Azerbaijan

    Primary supervisor for payment services, payment systems, and electronic money institutions; exercises exclusive licensing and supervisory authority over domestic and foreign credit institutions.

    [1][2]

Core laws & rules

  • Law of the Republic of Azerbaijan on Payment Services and Payment Systems (2025)

    Establishes the legal framework governing payment services, systems, and electronic money institutions under Central Bank supervision. Mandates licensing or registration for all supervised entities and defines core payment services.

    [1]

  • Law of the Republic of Azerbaijan on Cashless Settlements (2022)

    Mandates cashless settlements for specified transactions, defining permissible payment methods and establishing mandatory electronic transfer thresholds for VAT-registered businesses, salaries, utilities, retail sales, and medical services.

    [3]

Licensing & registration

  • Payment Institution

    Entities providing payment services must obtain a license from the CBA. The CBA has recently revoked some payment institution licenses and converted them to electronic money institution licenses.

    [4][5]

  • Electronic Money Institution

    Entities issuing electronic money must be licensed by the CBA. Recent decisions have issued these licenses to entities previously holding payment institution licenses.

    [5]

  • Payment System Operator

    Operators of payment systems must be licensed and maintain a minimum authorized capital of one million manats. They are required to submit detailed three-year business plans with financial projections. Capital: 1,000,000 AZN

    [6]

  • Currency Exchange

    Currency exchange activities require a license with tiered minimum capital requirements ranging from 300,000 to 600,000 manats based on operational regions. Capital: 300,000-600,000 AZN

    [7]

Restrictions & warnings

  • Strong customer authentication is mandatory for payment transactions, requiring at least two independent authentication elements and specific technical safeguards like session limits and password masking.

    [8]

  • The CBA has established updated service and interchange fee ceilings for transactions processed through the Instant Payments System, effective May 1, 2026, specifying percentage-based and fixed AZN tariffs.

    [9]

  • Payment service providers must adhere to standardized settlement procedures, including real-time gross settlement through correspondent accounts and batch clearing protocols for the AZIPS, LVPCSS, and IPS.

    [10]

Direction of travel

  • The CBA has established a formal Regulatory Sandbox framework for testing innovative financial products and services under controlled conditions, indicating a direction towards fostering fintech innovation while maintaining oversight.

    [11]

  • The CBA is actively standardizing technical requirements for payment instruments, including AZQR codes compliant with EMV QR Code Specification and ISO standards, and mandating ISO 20022 messaging standards for the Instant Payments System.

    [12][13]

Sources

  1. Law of the Republic of Azerbaijan on Payment Services and Payment Systems · 2025-06-04
  2. Regulation on Customer Due Diligence During Wire Transfers · 2025-04-21
  3. Law of the Republic of Azerbaijan on Cashless Settlements · 2023-02-06
  4. Central Bank Revokes Payment Institution Licenses of Cibpay and Multi Solutions LLCs and Issues Electronic Money Institution Licenses · 2026-06-18
  5. Central Bank issued electronic money institution licenses to Cibpay LLC and Multi Solutions LLC · 2026-06-18
  6. Regulation on the Organization and Implementation of Activities by Payment System Operators · 2024-05-07
  7. Approval of Currency Exchange License Application, Capital Requirements and Operational Regulation · 2025-06-25
  8. Regulation on the Application of Strong Customer Authentication · 2024-06-13
  9. Ceilings on Interchange Fees Applicable to Payment System Participants · 2026-06-01
  10. Regulation on Maintenance of Settlements Between Payment Service Providers · 2025-12-03
  11. Regulation on the Application of the Regulatory Sandbox · 2024-02-22
  12. Requirements for AZQR Codes for QR-Based Payment Transactions in Azerbaijan · 2025-12-22
  13. Operational Rules on Organization of Activities of Participants in the Instant Payments System · 2026-04-02

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This guide is compiled automatically from 13 primary-source documents published by Azerbaijan's regulators, reviewed by RegAlert, and refreshed monthly (last updated 2026-07-12). It is not legal advice — always confirm requirements with the regulator or local counsel before acting.