Three companies in the information technology sector will soon launch online payment systems without partnering with financial institutions, ushering in a new era of financial services outside banks.

ArifPay, Sunpay and Chapa are close to receiving permits from the National Bank of Ethiopia (NBE) after months of waiting. Officials at the central bank confirmed that these companies have fulfilled the requirements.

The NBE permitted private firms to operate as fintech service providers last year, issuing two directives governing the licensing and operation of payments system operators and payment instrument issuers. Companies in the digital payment industry can do business as switch, ATM, point of sale (POS) operators, or payment gateway service providers. These operators, which provide systems to facilitate payments and online transactions, are useful for e-commerce businesses looking to accept payments online. The central bank requires them to have a threshold of three million Birr in registered capital.

Over a dozen companies have applied for licenses over the past few months.

Established last year, Chapa Financial Technologies is among these companies. It has been providing crowdfunding systems to the Ethiopian Electric Power (EEP) and Ethiopian Diaspora Agency. Dubbed "My GERD," the crowdfunding application aggregates donations from diaspora members to the Grand Ethiopian Renaissance Dam (GERD). The platform has raised close to 250,000 dollars thus far. Launched last week, a platform called "Eyezon," commissioned by the Ethiopian Diaspora Agency and the Ministry of Foreign Affairs is geared towards crowdfunding activities for national causes such as Dine for Nation, COVID-19 relief and raising funds for internally displaced people.

"We've worked as technology providers before," said Nael Hailemariam, general manager of Chapa.

He disclosed that the company is considering offering more shares to the public.

Chapa's crowdfunding system is one of several launched recently, including the Commercial Bank of Ethiopia's (CBE) "itsmydam" platform.

These services are proliferating because of their simplicity in use and resonance with national agendas, according to Tewodros Tassew, a fintech expert.

Another fintech company, Sunpay Solutions, a subsidiary of Sunshine Investment Group, is awaiting a license to join the financial sector as a payment gateway and POS operator. The company was formed this year with a registered capital of 100 million Br.

Despite nearing the end of the process, the fintech companies have had their work cut out for them. A year following the liberalisation of the digital payment market, the central bank has introduced a new set of rules governing how these companies should be formed. Foreign nationals of Ethiopian origin are permitted to acquire shares, but they must pay in foreign currency. They can only receive dividends in Birr, however.

The new rules require the companies to surrender 30pc of the forex invested by Ethiopian-born foreign nationals from their escrow accounts held at commercial banks.