EMI in Kazakhstan - YB Case 2024

EMI in Kazakhstan

EMI in Kazakhstan
In the context of financial market globalization and active development of digital technologies, issues of Electronic Money Institution (EMI) acquire particular relevance for the economy of Kazakhstan. Electronic money, ensuring convenience and speed of transactions, contributes to the increase in non-cash payment volumes, which, in turn, impacts the improvement of the financial system's efficiency in the nation. Obtaining an EMI license is a key step for companies seeking to capture a significant share of the Kazakhstani monetary market, providing multifaceted services ranging from financial transaction processing to cryptocurrency transactions.

Regulating the realm of EMI in Kazakhstan exhibits certain peculiarities, including the absence of stringent currency restrictions and the ability to service clients from various states. These criteria foster a conducive atmosphere for the fintech industry's growth and the influx of investments into the country's economic system. However, the licensing process entails meticulous preparation and adherence to specific conditions, including entity registration and submission of requisite documentation to supervisory authorities.

This article provides a comprehensive overview of the key aspects of obtaining and utilizing an EMI license in Kazakhstan, analyzing both the legal and economic facets of the matter. Illuminating this subject contributes to a profound understanding of the significance of electronic money for the development of Kazakhstan's modern economy and furnishes practical recommendations for stakeholders.

Definition of electronic money (EMI)

Electronic Money Institutions (EMIs) represent a digital form of currency stored on electronic devices or remote servers. In contrast to conventional physical tender, electronic money facilitates real-time payments and disbursements via the internet, eliminating the requirement for the physical exchange of currency. The primary feature of EMIs is their capacity to streamline financial operations, enhancing accessibility and efficiency for a broader spectrum of users.

Characteristics of electronic money:
  • Digitalization The only type of digital cash is electronic, eliminating the need for physical circulation of banknotes or coins.
  • VersatilityThe use of EMI is not limited to geographical boundaries, enabling transactions to occur at a worldwide level.
  • SafetyElectronic money systems have a high degree of security, including encryption of confidential information and multifactor authentication.
  • AvailabilityDigital money is available around the clock, providing the user with the opportunity to make money transactions at any convenient time.
  • RegulationActions concerning the problem and dissemination of digital currency are governed by domestic legislation and require a special license.
Advantages of electronic money:
  • Transaction speed: fund transfers are carried out almost instantly, which significantly saves users time.
  • Reduced costs: no need to maintain an extensive network of branches and ATMs allows you to reduce operating costs.
  • Ease of use: managing accounts and making payments is possible using mobile applications and web platforms.
  • Integration with other services: electronic money easily integrates with various financial and commercial services, expanding the possibilities of their use.

Overview of the EMI market in Kazakhstan

The electronic money market in Kazakhstan, like in many countries worldwide, is undergoing dynamic development amidst the global digitization of financial services. This market segment has undergone significant transformations in recent years, reflecting the upward trends in demand for non-cash and digital transaction solutions among both the populace and businesses.

The development of the digital currency market in Kazakhstan commenced in the early 2000s with the emergence of pioneering services for online payments. Since then, the market has consistently expanded, adapting to evolving user needs and incorporating new technologies. A pivotal milestone was the establishment of regulatory frameworks for electronic money operations, fostering enhanced confidence in such payment instruments.

In the recent past, the EMI market in Kazakhstan has exhibited a consistent pattern of upward expansion. According to data from the National Bank of the Republic of Kazakhstan, the volume of transactions using electronic money increases annually by 20-30%. This indicates a growing interest from both individuals and legal entities in utilizing digital financial instruments.

Main players in the market

There are several key players in the EMI market of Kazakhstan, among which are:

  • Kaspi Bank is one of the largest financial institutions in the country, providing an extensive array of digital financial services, including electronic funds via its mobile application Kaspi.kz.
  • Halyk Bank is the largest bank in Kazakhstan by assets, offering electronic money services through its Halyk Homebank platform.
  • QIWI Kazakhstan functions as a global electronic funds transfer network, facilitating the transmission and receipt of digital currency.
  • YooMoney (formerly Yandex.Money) is a popular payment service in Russia and CIS countries, including the Republic of Kazakhstan, facilitating online transactions and transfers within a regulatory framework.

Comparative analysis of market shares of the main EMI providers

Market shares among EMI providers in Kazakhstan are allocated based on transaction volume, active user count, and the range of services offered. Kaspi Bank holds a leading position due to its innovative approach and extensive functionality of its mobile application, which enjoys widespread popularity among the population. Halyk Bank and QIWI also demonstrate significant market shares, leveraging their extensive network of terminals and the user-friendliness of their platforms. Despite its international orientation, YooMoney occupies a smaller market share, possibly attributable to higher competition and peculiarities of local regulation.

Features of EMI licensing in Kazakhstan

An EMI license in Kazakhstan serves as the pivotal regulatory mechanism, endowing companies with the lawful prerogative to engage in activities within the digital economy domain. This authorization grants entities access to a broad spectrum of financial services while imposing a set of obligations and standards to adhere to.

Range of services available under EMI license

Licensing in the EMI segment in Kazakhstan opens up opportunities for companies to offer a wide variety of financial services, such as:

  • Payment services. This includes accepting and processing payments from individuals and legal entities, making transfers between accounts within and outside the system.
  • Opening a digital wallet. Providing users with the ability to create and manage their digital wallets for storing and using electronic money.
  • Cryptocurrency exchange. Services for exchanging cryptocurrencies for fiat money and back, as well as operations with digital assets.
  • Conducting currency exchange and securities transactions. Including transactions in financial markets with currency and securities.
  • Consulting in the field of finance. Providing advice on financial management, investments and optimization of obligations to the tax authorities.

Taxation and ways to optimize fiscal obligations

In the Republic of Kazakhstan, a progressive tax policy has been introduced, providing for different rates and incentives for businesses in the financial sector. EMI license holders may avail themselves of certain mechanisms to optimize their tax obligations, including:

  • Use of tax preferences. Depending on the type and scale of services provided, enterprises have the opportunity to take advantage of tax preferences as well as lower tax rates.
  • Optimization of enterprise structure. Proper monetary and legal structuring of activities can help minimize the tax burden.
  • International tax planning. Utilizing international accords and other tools for foreign tax planning to prevent double taxation.

An EMI license unlocks a significant growth trajectory and market expansion potential for financial institutions in Kazakhstan. It enables legitimate provision of a wide array of financial services, while allowing for adaptable corporate governance and minimization of tax obligations. It is worth noting that successful operation under the EMI license entails strict compliance with regulatory mandates and benchmarks, as well as continuous monitoring of legislative changes.

The importance of the EMI license in the development of financial business in Kazakhstan

Securing an electronic money license in Kazakhstan transcends mere operational authorization. It functions as a financial institution's strategic tool aiming to solidify their market presence, cultivate a robust client confidence base, and achieve a competitive edge.

Expansion of market opportunities
Licensing EMI in Kazakhstan provides enterprises with a key to global financial operations, granting access to a wide range of services, including electronic money issuance, payment systems, cross-border transfers, as well as solutions related to cryptocurrencies and digital wallets. This opens up opportunities for capturing significant market shares and servicing clients at the international level.
Integration with banking and payment systems
An EMI license in Kazakhstan grants companies a strategic advantage by facilitating access to essential international banking and payment networks, encompassing SWIFT. This augments their proficiency with payment processing and delivering superior services to customers, consequently streamlining interactions with financial institutions.
Increasing trust and improving image
Securing an EMI license in Kazakhstan signifies a company's commitment to rigorous regulatory compliance, acting as a hallmark of excellence and dependability. This engenders increased consumer and partner confidence, favorably affecting the market perception of the company's brand.
Innovative development
A license for electronic money drives companies towards innovation, incentivizing them to create pioneering products and services. In the continuously shifting fintech services landscape, enterprises are oriented towards providing customers with unique and convenient solutions, which are key to their growth and success.
Attracting investments
For investors, the possession of an EMI license by a Kazakhstani company is deemed a pivotal indicator of earnest intentions and growth potential. Licensed entities frequently garner heightened attention from venture funds, private investors, and financial institutions.
Compliance with established regulatory standards
Obtaining permission to operate with electronic money in Kazakhstan confirms that the company's transactions strictly adhere to both national and international legislative standards in the financial sector. This encompasses AML/CTF rules and safeguards the privacy of client data. Adhering to these criteria helps mitigate the likelihood of legal infractions and potential financial sanctions.

Legislative acts regulating the circulation of electronic money in Kazakhstan

In the Republic of Kazakhstan, the regulatory framework in the sphere of digital currency is grounded on a series of pivotal laws, which establish the legal foundation for dealing with electronic currency, set criteria for market participants, and delineate the competencies of supervisory bodies.

Main legislative acts:
  • The "Law on Payments and Payment Systems" serves as the cornerstone for regulating transactions and activities in the electronic money sphere. This legislation governs the payment process, criteria for payment systems, and norms regarding the introduction and utilization of electronic currency.
  • The last updated in 2020, the "Law on the National Bank of the Republic of Kazakhstan" empowers the National Bank as the primary body of financial regulation, including oversight of operations involving digital currencies.

The role of the National Bank of Kazakhstan in regulating EMI

In the realm of digital currencies within the jurisdiction of Kazakhstan, the pivotal role in the regulatory and oversight framework of the electronic money sector is assumed by the National Bank of Kazakhstan (NBK), serving as the primary regulator. Serving as the primary governing body, this entity not only issues licenses for operations involving electronic money but also conducts comprehensive monitoring of licensees' activities, establishing stringent standards for customer information security and protection.

The regulator takes a proactive approach to consumer protection by establishing frameworks for resolving grievances and conflicts. Fostering the evolution of the digital currency ecosystem, which includes encouraging innovation and the deployment of cutting-edge technology in the banking sector, is a core tenet of the regulator's mandate.

The Agency for Regulation and Development of the Financial Market is also a key driver of FinTech advancements, principally by streamlining the creation of a regulatory infrastructure for the operations of EMIs.

Key regulations for Kazakhstani electronic money providers

In Kazakhstan, stringent regulatory standards have been instituted for entities engaged in the issuance and circulation of electronic money, thereby ensuring stability and security in the financial market, as well as safeguarding consumer rights. These standards encompass various facets of operations, including legal status, financial robustness, risk management, AML/CTF measures.

Legal registration:

  • Registration of a legal entity. To carry out transactions with electronic currency, a legal entity must be registered in Kazakhstan and have a license confirming this right.
  • Licensing. The organization must possess authorization from the NBK, certifying the legitimacy of working with digital currency.

Risk control systems:

  • Internal rules. Operators must develop and implement internal rules for risk management, including credit, operational, market and other types of risks.
  • Data protection. It is necessary to ensure reliable protection of customer personal information and transaction information.

Anti-Money Laundering and Anti-Terrorist Financing:

  • Companies engaged in electronic money operations in Kazakhstan are required to develop and implement an effective system of AML/CTF measures in accordance with national and international legislation.
  • Customer identification. Conducting procedures for verifying and authenticating the identity of clients when opening accounts and conducting transactions.
  • Continuous transaction monitoring. Monitoring consumer transactions continuously for questionable conduct and promptly reporting any such instances to the appropriate regulatory bodies.

Additional requirements:

  • Consumer rights protection. Service providers are obligated to guarantee the clarity of service delivery conditions, encompassing comprehensive details regarding pricing schedules, fees, and dispute resolution procedures.
  • Technical infrastructure. Reliable technical infrastructure is necessary to guarantee the safe and uninterrupted operation of services.

For all EMI providers in Kazakhstan, these are strict regulations aimed at creating a reliable and secure environment for the expansion of the digital finance sector in the country.

Entering EMI into the register in Kazakhstan

Within the jurisdiction, oversight of electronic money operations deviates from the traditional licensing model. Instead, electronic money systems are enrolled within a dedicated registry. To qualify, a system must possess an issuer, akin to a bank, that is responsible for the issuance of monetary instruments. In certain instances, an electronic money system itself may assume the issuing role, provided it engages in activities characteristic of banking institutions. The generation of electronic currency hinges upon the acquisition of funds from individual clients or representatives, in accordance with pre-established agreements and protocols inherent within the framework.

Pursuant to the NBK's regulatory regime for electronic instruments, established by Board Decision No. 202 on August 31, 2016, which outlines issuer and system operator eligibility requirements, the process involves the following stages:

Preparation for entry into the register
  • Exploration of legal frameworks and standards for digital currency platforms.
  • Onboarding and compilation of all requisite documentation, encompassing the system's operational guidelines, details pertaining to the issuer entity, template agreements for virtual currency holders, demonstrable proof of established security measures in addition to technical schematics delineating the characteristics of the system and underlying technologies.
Entry into the register
  • Presentation of the application and requisite documentation to the NBK for evaluation and incorporation into the registry.
  • The NBK checks the submitted documents demonstrating adherence to defined requirements.
Notification and system operation
  • Upon application approval, the issuing entity will notify the NBK within ten business days of starting electronic money issuance activities, furnishing all requisite information.
  • When the system is live, it guarantees that users may release and transfer virtual money among themselves while adhering to the law and other established guidelines.

This mechanism, while deviating from the traditional licensing framework, empowers companies to function legitimately within the Kazakh electronic payments landscape, ensuring compliance with all mandatory regulations and stipulations.

Legal structures engaged in digital currency transactions in Kazakhstan

Businesses in the digital money space operating inside Kazakhstan have a variety of legal structures to select from when conducting business. Choosing the right legal structure is crucial since it affects the enterprise's legal personality, management structure, taxation structure, and additional crucial facets of the business process. The primary organizational and legal forms, together with their characteristics and prerequisites, that are available to EMI enterprises in Kazakhstan are listed here.

Limited Liability Company (LLC)

LLC serves as a prevalent selection for SMEs in Kazakhstan, encompassing the EMI sector. This business structure necessitates the involvement of one or more partners (capped at 50), whose financial responsibility is confined to the extent of their contributions to the company's share capital.


  • The founders are not personally liable for the company's debts.
  • The company is managed through the general meeting of founders and the executive body (director or board).
  • A relatively simple process of organizing and managing an enterprise.
Joint Stock Company (JSC)

JSC is suitable for large-scale projects and enterprises planning to attract investments through the issuance of shares. It can be open (PJSC) or closed (PrJSC), depending on whether free transfer of shares among an indefinite multitude of individuals is anticipated.


  • Shareholders bear no responsibility for the company's commitments and only assume risks proportional to their invested sums.
  • The management of the JSC is carried out through the general meeting of shareholders, the board of directors and the executive body.
  • A more complex corporate structure and reporting is required, compared to an LLC.
General partnership

A full partnership is an association of two or more partners who conduct common business under a common name. All participants in the full partnership bear joint and several liabilities for the partnership's obligations with all their property.


  • It is not the preferred form for EMI activities in Kazakhstan due to the unlimited liability of participants.
  • Requires close and trusting interaction between the founders.
Limited partnership

A limited partnership comprises two types of participants: limited partners, whose liability is restricted to their invested capital, and general partners, bearing unlimited liability for the company's obligations.


  • Combines elements of a general partnership and LLC.
  • The use of this approach allows us to distinguish between investment funds and funds for the current activities of the company.

The selection of a specific organizational and legal form for enterprises in the EMI sector in Kazakhstan depends on a multitude of factors, including company scale, strategies for attracting additional capital, risk management plans, and founders' preferences. For such companies in Kazakhstan, the most commonly chosen forms are LLCs and JSCs, as they provide a successful combination of managerial flexibility, growth opportunities, and protection of founders' rights.

Mandatory documents and criteria for obtaining an EMI license in Kazakhstan

To qualify for an EMI license in the Republic of Kazakhstan, a firm must adhere to a sequence of prerequisites and furnish an expansive bundle of documents. This process underscores the paramount importance of meticulous preparation and meticulousness to harmonize with the norms and prerequisites established by the NBK.

The list of documents required for obtaining an EMI license in Kazakhstan includes:

  • The company's charter: the primary document defining the structure, objectives, rights, and obligations of the founders and management.
  • Certificate of registration with government authorities: confirmation of the corporate entity's lawful standing.
  • Minutes of the management elections: papers establishing the legitimacy of the appointment of the director and key managers.
  • Delegates' rights certification papers: required for representatives of a firm seeking licensure to confirm their authority to act on its behalf.
  • Verification of share capital: documentation evidencing the paid-in share capital level in compliance with the NBK's minimum capital adequacy requirements.
  • Business plan: a detailed plan describing the business model, expected financial flows, market analysis, and development strategy.
  • Financial forecasts: estimates of income, expenses, and profit for the coming years.
  • Risk management policy: description of mechanisms for identifying, assessing, monitoring, and minimizing risks.
  • Internal control and audit system: documentation reflecting the organization of internal control and audit in the company.
  • Business continuity plan: measures taken to restore the company's functioning in the event of emergencies.
  • AML/CTF program: encompasses customer authentication protocols, surveillance of monetary dealings, and notification of dubious transactions.
  • Appointment of an AML/CTF compliance officer: documentary evidence of the appointment of a person responsible for compliance with AML/CTF regulations.
Technical and operational documentation
  • Description of the technical platform: technical equipment parameters and software architecture used to provide EMI services.
  • Information Security Policy: implemented measures to guarantee the safeguarding and secrecy of client information and transactional data.

Protecting transactions and user data privacy in EMI organizations in Kazakhstan

In the electronic payment industry, transaction security and client information confidentiality take precedence and necessitate heightened attention from firms operating within the territory of Kazakhstan. It is crucial for them to adhere to both local legislative enactments and global security standards.

Transaction security systems:
  • Data encryption. All transaction-related data must be transmitted and stored in an encrypted format using current and proven cryptography methods.
  • Two-factor authentication. To strengthen transaction security and ensure secure access to their customers' accounts, EMI companies in Kazakhstan must implement two-factor authentication systems that require confirmation of the user's identity through two independent channels.
  • Transaction monitoring. Continuously monitor transactions for suspicious or unusual transactions that may indicate fraud or hacking attempts.
  • Fraud prevention systems. The introduction of automated systems capable of analyzing transactions in real time and blocking those that are considered fraudulent.
User data protection:
  • EMI companies are required to comply with the requirements of the Law of the Republic of Kazakhstan "On Personal Data and Their Protection", ensuring the confidentiality and security of clients' personal data.
  • Development and publication of a privacy policy that clearly describes the conditions for collecting, storing, processing and transferring users’ personal data.
  • Conducting regular external and internal security audits to identify potential threats and weaknesses in data security mechanisms.
  • Conduct regular training for employees on aspects of data protection and security of information resources to increase their awareness and competence in these areas.
  • Backing up user data and security technologies to ensure recovery in the event of technical failures or cyberattacks.
  • Committed to Complying with global security protocols such as PCI DSS (Payment Card Industry Data Security Standard) to ensure strong privacy and transaction protection.

Organizations providing electronic money services in Kazakhstan must allocate maximum attention to information protection and financial transaction security issues, as these elements are essential for upholding customer confidence and guaranteeing the efficient functioning of virtual payment business operations.

Interaction with traditional banking systems in Kazakhstan

The interaction between EMI providers and traditional banking entities in Kazakhstan encompass a broad spectrum of aspects, including cooperation, competition, and impact on the banking industry. This interaction plays a pivotal role in shaping the contemporary economic and fiscal landscape of the nation, facilitating ingenuity, and enhancing the quality and accessibility of financial services for both the populace and businesses.

Collaboration between EMI and traditional banks in the Republic of Kazakhstan is manifested in several key directions:

Integration of payment systems
Many EMI platforms integrate with banking systems to facilitate the capability of replenishing electronic wallets via bank cards, conducting transfers to bank accounts, and vice versa. This collaboration streamlines users' access to a wide array of financial services.
Joint products and services
Certain banks and EMI platforms are developing collaborative products, such as co-branded cards, amalgamating the benefits of traditional banking cards with the flexibility of electronic wallets.
Technology partnership
Banks frequently leverage EMI technologies and platforms to enhance their digital services, encompassing mobile device payments, online banking, and other cutting-edge methodologies.

Competition with traditional financial institutions

At the same time, EMI in Kazakhstan is entering into competition with traditional banks for clients, offering more convenient, expedited, and occasionally more advantageous services.

  • Low cost of servicesDue to lower transaction costs, EMI platforms often offer their services at lower rates than banks.
  • Ease of useEMI platforms emphasize user-friendliness and ease of transactions, which attracts youth and technology-savvy users.
  • Innovative productsEMIs are actively introducing innovations, such as cryptocurrency transactions, P2P transfers and others, ahead of traditional banks.

The interaction of EMI platforms with traditional banking systems exerts a significant influence on Kazakhstan's banking sector. Competition from EMIs incentivizes banks to innovate, enhance service quality, and adopt new technologies. Collaborating with EMIs enables banks to expand their presence in the digital space and offer clients a broader range of services. To maintain competitiveness, banks must rethink their traditional business models, placing emphasis on digitization and customer-centricity.

The interaction between traditional banks and EMIs in Kazakhstan fosters the development of a more innovative, efficient, and inclusive financial system that aligns with the needs of contemporary society and the economy.

EMI market growth forecasts in Kazakhstan

The prospects for the development of the EMI market in Kazakhstan promise to be promising, given current trends and the potential for the application of modern technical developments. In recent years, significant interest in electronic payment forms has been observed, contributing to the expansion of the market audience with the emergence of new players. It is expected that the volume of transactions through EMI platforms will increase, which, in turn, will stimulate the expansion of the range of services offered, including comprehensive financial solutions for businesses and individuals.

One of the key directions in the development of EMI services in Kazakhstan is the integration of blockchain technologies and support for cryptocurrency operations. This direction attracts the attention of both users and investors, considering the growing interest in digital assets. In addition, the application of artificial intelligence and machine learning for transaction analysis, improving security systems, and personalizing offers is becoming increasingly relevant. These technologies enable the automation of customer service and increase the efficiency of platform operations.

The influence of international practices stands as a pivotal factor shaping the trajectory of the EMI market in Kazakhstan. Assimilating international experience within the regulatory ambit of EMI services holds promise for fostering an environment conducive to market advancement. Progress and integration of systems for cross-border transactions address the imperatives of globalizing monetary flows in both economic and private financial domains. Broadening the parameters of partnerships to include international fintech firms and banks for the incorporation of cutting-edge technologies and methodologies fosters the cross-pollination of knowledge and expertise, thereby exerting a positive influence on the evolution of the Kazakhstani EMI landscape.

YB CASE provides qualified assistance and support services for EMI operations in Kazakhstan. The company's specialists possess extensive professional experience in financial technologies and compliance with regulatory standards, enabling comprehensive support at every stage of EMI licensing, including assistance in preparing required documentation, consultations on legislative and regulatory compliance, and facilitation of interactions with governmental bodies and banking institutions.

Engaging the services of YB CASE ensures a comprehensive approach to addressing tasks related to the launch and operation of EMI platforms, thus facilitating successful business development within the dynamically evolving financial landscape of Kazakhstan.

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