Interoperability, Competition Not Opposing Ideas

Interoperability, Competition Not Opposing Ideas

Aug 29 , 2026.

Dear Editor,

I read your recent news story on Ethiopia's unified government payment platform headlined, “Fed Tests a Payment Window for the Whole Government, Starting with Health" [Volume 27, Number 1373, August 22, 2026], with great interest. I appreciate the effort to include different perspectives on a subject that will shape how citizens deal with public services in the coming years.

The concerns raised by Bruke Gebreyes, a digital payments practitioner, are important and deserve space in the public domain. Even so, the project needs one more perspective on why interoperability and competition are unopposed.

The unified payment initiative is not meant to replace banks, wallets or private payment providers. Its purpose is to establish a common national payment infrastructure that lets different financial institutions and customer-facing platforms connect to government services through one interoperable system.

The critical principle is that government platforms should not need to know which bank, mobile money operator or payment service provider the citizen or provider uses. A government platform requests a payment through a standardised payment service, while the national unified infrastructure provides the interoperability behind it. This lets public service platforms build a single integration with EthSwitch, rather than developing separate integrations with individual banks and payment service providers.

Today, many public institutions run fragmented and expensive digital systems that impose direct and indirect costs on public entities and on citizens. The health sector alone has dozens of separate systems. Connecting every bank and every payment provider independently to each of these would be technically expensive and hard to scale.

Instead, the proposed architecture seeks to standardise how public institutions connect, through common application programming interfaces, while linking the wider payment ecosystem through the national switch. The objective is not to reinvent payments but to unify access to them.

One concern raised in your story was that the system could deepen dependence on particular providers or weaken competition. The opposite is the intended outcome. A citizen should not have to open a particular wallet merely to pay for a public service.

Many Ethiopians keep their money in bank accounts, while others prefer mobile wallets. The government's role should be to see that all eligible payment platforms can connect to public services, rather than steering customers towards one provider. Competition should happen at the customer level, not through exclusive access to government payments.

Wallet providers should compete by offering better services, credit products, convenience and customer experience. Banks should equally be able to provide seamless payments directly from customers' accounts. The unified infrastructure is designed to make this possible, allowing different providers to operate on the same interoperable rail.

Another issue concerns transaction costs. Under the fragmented system, a customer may first move money from a bank account into a wallet and then make a second payment to a government institution, possibly paying charges at several stages. Different payment gateways also apply different fee structures, creating inconsistency across platforms. A unified infrastructure offers the chance to reduce unnecessary intermediaries and to establish a more transparent and affordable national fee structure as the system evolves.

The existing infrastructure has not been configured to impose platform fees. Future pricing arrangements will require policy and regulatory decisions that weigh the affordability and sustainability of the whole public service. However, the intention is for a framework in which charges are fair, transparent and nationally consistent, rather than set by unilateral and fragmented payment channels.

Interoperability is already a familiar idea in the domestic financial sector. Citizens withdraw cash from ATMs, use point-of-sale (PoS) machines and transfer money across institutions because systems communicate through shared infrastructure, not because every institution works alone. The same principle is being extended to government payments.

The national switch, therefore, serves as infrastructure, not as a replacement for banks or payment companies. Its role is to provide a secure and standardised connection that enables many institutions to participate as government platforms become more integrated.

The broader ambition under “Digital Ethiopia” is to reduce fragmentation across public services, simplify access to government platforms and make payment systems inclusive enough to serve citizens wherever they live and whichever financial provider they use. That is why national payment platforms, including the Instant Payment System (IPS), are being built to create national infrastructure rather than relying on selected commercial approaches.

I believe debate over the design of this system is healthy. Concerns about competition, affordability, and private-sector participation should continue to be examined carefully as stakeholders shape the scheme.

Yet these discussions should distinguish between a unified interoperable infrastructure and a system that mandates the use of a single payment provider. They are fundamentally different policy approaches.

Desta Bayissa

Project Lead

PUBLISHED ON Aug 29,2026 [ VOL 27 , NO 1374]