Algeria’s Open Banking Framework: How API Regulation Will Transform Fintech

The PSP Regulation: Algeria’s First Fintech Licensing Framework

On August 17, 2025, the Bank of Algeria issued Instruction No. 06-2025, formally establishing rules for Payment Service Providers (PSPs). This regulation is Algeria’s first dedicated framework for fintech licensing, creating a legal pathway for non-bank entities to offer digital payment services under central bank supervision.

The regulation introduces a three-tier system for digital wallets based on customer verification levels. Level 1 permits balances up to approximately 100,000 DZD (~$740) with basic identification. Level 2 allows up to 500,000 DZD (~$3,700) with proof of income and official identification. Level 3 supports up to one million DZD (~$7,400) but requires enhanced due diligence including a video interview.

All services must be conducted exclusively in Algerian dinars. The regulation mandates agent network standards, consumer protection requirements, and anti-money-laundering obligations — creating a compliance framework that parallels European PSP regulations while adapting to Algeria’s cash-dominated economy.

From PSP Licensing to Open Banking: The Gap

Instruction 06-2025 answers who can offer digital payment services and under what conditions. What it does not yet address is how those services connect to existing bank accounts and financial data — the core of open banking.

Open banking, in its standard definition, requires banks to share customer account data and payment initiation capabilities with authorized third-party providers via standardized APIs. The EU’s Revised Payment Services Directive (PSD2) mandated this sharing in 2018; Nigeria launched its Open Banking Framework in 2023; and Saudi Arabia’s central bank published open banking standards in 2025.

Algeria has not yet enacted a formal open banking mandate. As of early 2026, no formal regulations or frameworks exist to require banks to open their data or payment systems to licensed third parties via APIs. This means fintechs operate within their own closed ecosystems rather than connecting to customers’ existing bank accounts.

The Fintech Strategy 2024-2030 signals government intent to develop this capability. Open banking and instant payments were central topics in expert discussions during the strategy’s development, positioning them as levers for financial transformation. But policy intent has not yet translated into a regulatory mandate.

What Open Banking Would Enable in Algeria

Account Aggregation

Algerian consumers and businesses currently manage separate relationships with banks, Algerie Poste (CCP accounts), and emerging digital wallets. An open banking framework would allow authorized fintechs to aggregate all accounts into a single dashboard, giving users a complete view of their financial position. For Algeria’s approximately 47 million internet users, this consolidation would be transformative.

Payment Initiation

Licensed fintechs could initiate payments directly from customers’ bank accounts, bypassing card networks. This matters in Algeria because card penetration remains low — Algerie Poste’s Edahabia card and CIB interbank cards serve as the primary electronic payment instruments, but cash still dominates an estimated 60% of transactions. API-based payment initiation could enable direct bank-to-merchant transfers at lower cost than card processing.

Lending and Credit Scoring

With consent-based access to bank transaction data, fintechs could build credit scoring models for populations currently excluded from formal lending. Algeria’s SMEs — approximately 1.2 million enterprises — often struggle to access bank credit due to insufficient documentation. Transaction-based credit assessment could unlock lending capacity without requiring traditional collateral.

Cross-Border Integration

Algeria’s 2025 membership in the Pan-African Payment and Settlement System (PAPSS) creates a cross-border payment rail. Open banking APIs would enable Algerian fintechs to build services connecting domestic accounts to PAPSS, facilitating intra-African trade payments without routing through European correspondent banks.

Algeria’s Fintech Ecosystem: Ready for APIs?

The ecosystem shows early signs of readiness. An estimated 30 to 35 fintech startups operate in Algeria, covering digital payments, mobile banking, financial infrastructure, and crypto-enabled services. Algerie Poste’s BaridiMob application has demonstrated consumer appetite for digital financial services, with millions of active users conducting person-to-person transfers and bill payments.

Bank-side readiness is more uneven. Algeria’s public banks — which dominate the financial system — have been modernizing core banking systems, but API-readiness varies significantly across institutions. Private banks and the newer digital initiatives from established players like Société Générale Algérie and BNP Paribas El Djazair have more modern technology stacks that could support API integration more rapidly.

The digital transformation of Algeria’s banking sector, governed by the broader Banking and Monetary Law No. 23-09, provides the legislative umbrella under which open banking regulations could be enacted. The law gives the Bank of Algeria authority to set standards for electronic payment systems and digital financial services.

Regulatory Design Choices Ahead

Algeria faces several design choices that will shape its open banking framework. The Bank of Algeria must decide between a mandated approach (requiring banks to share data and APIs, as the EU and Nigeria have done) or a market-led approach (encouraging voluntary API adoption, as some Asian markets have chosen). Given Algeria’s bank-dominated financial structure and the public sector’s significant role, a mandated approach with phased implementation timelines appears more likely to drive adoption.

Technical standards are equally important. The framework must specify API protocols, authentication standards, data formats, and security requirements. International standards like the Berlin Group’s NextGenPSD2 or the UK’s Open Banking Standard provide templates, but Algeria will need to adapt these for its regulatory context, language requirements, and existing banking infrastructure.

Consumer protection and data sharing consent mechanisms must align with Algeria’s newly strengthened data protection framework under Law 25-11. Banks cannot share customer data with fintechs without explicit, informed consent — and customers must have the ability to revoke that consent at any time.

Building Toward the Framework

The regulatory building blocks are falling into place. Instruction 06-2025 creates the licensed fintech entities that would consume bank APIs. Law 25-11 establishes the data protection framework governing shared financial data. The Trust Services Law provides the digital identity and authentication infrastructure. PAPSS membership creates the cross-border payment rail.

What remains is the connective regulation: a Bank of Algeria instruction or decree specifically mandating API-based data sharing between banks and licensed third parties, with technical standards, implementation timelines, and enforcement mechanisms.

Sources & Further Reading

• Algeria Launches First Fintech Regulation for PSPs — Startup Researcher
• Algeria’s Fintech Ecosystem in 2026 — The Fintech Times
• Open Banking in Algeria — Open Banking Nigeria
• Algeria Opens for Fintech: New PSP Rules — Launch Base Africa
• Digital Transformation of Algeria’s Banking Sector — KUEY Journal