Bank of Abyssinia has replaced its former mobile wallet application with Gizepay, which allows its customers and users to create a mobile wallet account without an account at Abyssinia. The new system replaces Enqupay, a platform that the Bank used for a year and a half.
The new platform is available in three forms: a mobile application on both Android and IOS; a web-based wallet; and as an Unstructured Supplementary Service Data (USSD) programme, which does not require a smartphone or a computer to use. The IOS application is yet to be launched.
Abyssinia acquired the system from a foreign fintech company, Digital Cash, which is based in Amman, Jordan. The system was acquired through the Operating Expenses (OPEX) licensing scheme, wherein the Bank will pay a fee for every transaction. The transaction fee is to be paid quarterly.
"Compared to other banking systems, this is a good deal," said Sosena Mengesha, chief digital banking officer at Abyssinia, further explaining that the licensing scheme has a lower initial cost than core banking systems, which require enormous investment.
Digital Cash, in addition to deploying the wallet system for Abyssinia, has trained some of the Bank's staff so that they can perform simple customisations in-house. An attempt to reach out to managers at Digital Cash bore no fruit as the management did not respond to inquiries from Fortunebefore the paper went to print.
In a directive that became effective in April 2020, the National Bank of Ethiopia (NBE) required payment issuers to ensure compliance with the customer due diligence requirements in maintaining and operating electronic accounts while permitting individuals to access mobile wallet services without having to open a regular bank account. The due diligence requirement, commonly termed the Know Your Customer (KYC) protocol, is fulfilled when customers present valid identification cards, photographs and mobile phone numbers.
To register on Gizepay, customers with no account have the option of signing up at the Bank's branches or with any of the available 107 GizePay agents. Since its soft launch in late November, the Bank has managed to acquire 22,787 mobile wallet customers.
Utility payment options, such as mobile top-up, air ticket purchases and DSTV subscription fees, are available on Gizepay, much like most mobile wallets.
Water bill payment options will also be incorporated soon, according to Sosena. The Bank, which has 3.8 million customers as of last December, is also working to integrate a system referred to as E-bill, an electronic management system that allows customers to make recurring payments through their mobile wallet.
"We plan to avail school fee payment options for 350 schools through GizePay," she said.
The migration has disappointed the founder of Ethio Electronic Kifiya, which developed Enqupay for the Bank in 2019. The company initially named the app Payqwik but rebranded it later as Enqupay upon the request of Abyssinia.
However, the Bank abruptly disconnected the system in July 2020 without notice, according to Robel Worku, CEO of Ethio Electronic Kifya, which claims to have invested about 15 million Br in the development and maintenance of Enqupay.
"We also agreed to settle for revenue-sharing as the mode of payment for the services rendered," said Robel, who alleges that, following weeks of inquiry, he was told that Enqupay was disconnected due to performance issues, which he claims could not have been the case. "Quality issues can be addressed right away; it was a perfectly working app."
The Bank's management was reluctant to comment on the issue, but the circumstances suggest that the case might be heading to court litigation.
All Enqupay users have been notified to recover their accounts by installing the new app. However, users whose identities have not yet been verified are obliged to comply with KYC before being granted full access and the option to withdraw their money if they so choose, according to Sosena.
Abyssinia is looking to build a functional digital ecosystem through onboarding Gizepay agents and merchants that accept payments via GizePay. The number of merchants stands at 122 as of last week. The Bank also operates BoA Mobile, BoA online banking, BoA verify and E-commerce for cross-border payments.
There might be a need to develop an aggregate app that avails all digital banking solutions on a single platform, according to Sosena.
Tewodros Tassew, a fintech expert with more than a decade of experience, reflects that digital banking app development aligns well with the central bank's fintech initiative.
"However, the apps usually target the urban market," he said.
Tewodros also says that while mobile payment apps' success depends on the nation's infrastructure, the key element is distribution. He argues that the critical question of how to effectively target the unbanked market, which predominantly resides in rural areas, is yet to be addressed.
"There's also a need to incorporate more uses beyond the common mobile top-up and utility payment options," he said.
PUBLISHED ON Jan 16,2021 [ VOL 21 , NO 1081]
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