All of the commercial banks can now issue foreign currency debit cards to travelers, according to a new circular issued by the National Bank of Ethiopia (NBE). For the past two years, the state giant Commercial Bank of Ethiopia (CBE) has been piloting the project by issuing the international prepaid cards only to traveling high-level government officials.

Signed by Yinager Dessie (PhD), governor of the central bank, the circular stated that the pilot period has come to an end and all banks can begin the service as of the end of last month. The circular fully activated the directive that was approved in August 2018, allowing banks to issue foreign currency cards to travelers, who had been taking the foreign currency in cash. While enacted, the two-year-old directive did not have a clear timeline as to when the piloting would end and when the full service would begin.

To issue the cards, the banks should have an agreement with seven international card payment networks including American Express, Visa Card, Master Card, Diners Club, JCB, Union Pay and Discover. The banks should also install a card personalisation machine or outsource the project, establish a central clearing system, and put in place secure telecommunications infrastructure services. The banks can issue cards, which will be valid for two years, in currencies of the destination country or in dollars, euros and pounds.

Before acquiring the prepaid international cards, travelers should secure an international debit card license from banks, and the license will be subject to a yearly base renewal. While crediting the foreign currency to the international cards, the banks are allowed to charge travelers only 1.5pc of the value as a service fee.

Beyond crediting the cards with foreign currency, forex bureaus of banks are required to refund the card's unused foreign currency into Birr after checking the details of transactions and the account statement, according to the directive.

The initiative is not completely new. A few years back Dashen Bank, under the leadership of former President Lulseged Teferi, had applied to start the service. However, the proposal from Dashen was neither approved nor rejected.

The new directive enables Eth-Switch to take a role in the process, according to Yilebes Addis, CEO of Eth-Switch S.C., the operator of the national electronic retail payments switch.

"The company has a role in working on a local and international gateway," said Yilebes. "We can also issue international cards for banks, with our card personalisation."