Fed Opens Up Digital Fuel Payments Breaking the Dominance


Fed Opens Up Digital Fuel Payments Breaking the Dominance

A new application developed under Ethio telecom is set to allow fuel transactions through approved commercial banks, microfinance institutions, or payment service providers. It is expected to shake up the digital fuel payment landscape by introducing a new system that dismantles the dominance of Telebirr, the Commercial Bank of Ethiopia (CBE), and the Cooperative Bank of Oromia (COOP). The new app is expected to increase competition, improve transparency, and promote financial inclusion in the digital fuel payment sector. Over 20 financial institutions and payment facilitators have expressed interest in joining the market, including Wegagen Bank, Dashen Bank, and Nib Bank. The Ministry of Transport & Logistics aims to diversify the financial sector and create a more inclusive environment. Salman Mohammed, fuel subsidy project office coordinator at the Ministry, disclosed a centralised system will enable the Petroleum & Energy Authority and the Ministry to monitor transactions. Banks see this as an opportunity to expand their customer base and deposit mobilisation while fintech companies are eager to offer their digital payment solutions. The move is seen as a positive step towards financial inclusion but requires a robust system to handle increased traffic and prevent disruptions. Concerns exist regarding potential system glitches and the technical capabilities of new entrants. Experts suggest a trial period with a limited number of institutions is recommended to test the system's effectiveness before full rollout.


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