Fortune News | Sep 14,2019
Dec 24 , 2022
By BERSABEH GEBRE ( FORTUNE STAFF WRITER )
Foreign companies can operate in the national payment systems as Parliamentarians voted to revise the law enacted for the past decade. The bill was passed to allow investment fees during involvement in business blocked for foreign nationals.
Yinager Dessie(PhD), governor of the National Bank of Ethiopia (NBE), told members of the Parliament that the bill addresses payment issuers and facilitators, allowing them to operate in areas the banks cannot cover.
Foreign companies can also establish subsidiaries to run the business and settle their investment fees in foreign currencies. The amount of the investment fee is yet to be decided.
Sources at NBE told Fortune that the recently operational foreign telecom company Safaricom and the federal government are discussing the amount of investment fee the company will pay to engage in the digital payment system. According to Yinager, Safaricom is waiting for the settlement to obtain its license.
Last month, the bill was up for discussion in the presence of representatives from the Ministry of Finance, the central bank and the two telecom operators Safaricom and Ethiotelecom.
Although the previous proclamation was given the green light early, licensing and authorisation for the operation started two years ago. Seven payment operators have been granted licenses fulfilling the requirements of a paid-up capital from three million to 300 million Br.
Established by 42 shareholders with an initial capital of 14 million Br, Arifpay Financial Technologies was the first to obtain an operating license. It launched its digital payment service a couple of weeks ago after securing a commercial license from the central bank a month ago. It provides digital payment services for utility bills, air time top-ups and school fees in smartphones, point of sales and QR payment terminals. Arifpay plans to facilitate 100 transactions within one POS machine in a day.
According to Bernard Lorined, CEO of Arifpay, the foreign fintech providers will have better investment and human capital to engage as switch operators.
"There may be proper management of ATMs if Banks outsource it," he said.
The lack of management of ATMs has forced the state-owned Commercial Bank of Ethiopia to float a tender to outsource it earlier this year.
Telebirr garnered more than 24 million customers and facilitated transactions valued at more than 100 billion Br. After its launch, it integrated 16 banks and partnered with dozen of federal institutions.
Kacha Digital Financial Services was the second payment issuer next to Telebirr, which Ethiotelecom runs. The payment issuers mainly open accounts on potential users' to let the user deposit and transact the cash electronically. The issuers should partner with at least one bank to deposit the money in a trusted account.
Yigermal Meshesha, marketing & business development manager, is also hopeful that there will be technological advancement and knowledge transfer with the open doors.
These operators provide fintech platforms directly to customers via existing financial institutions, including microfinance institutions, while some autonomously provide electronic money issuance.
These platforms facilitated 320 billion Br transactions last year. Commercial banks were paving the way for mobile money services, with most service providers interoperable with them, such as CBE birr of Commercial Bank of Ethiopia and Amole of Dashen Bank.
Industry players fear money laundering can be exacerbated unless robust monitoring tools are prepared to regulate the sector.
Endashaw Tesfaye works at United Nations Capital Development Fund (UNCDF) and previously served as deputy CEO of M-Birr. He fears that allowing foreign fintech firms might tend to swallow the domestic ones on shaky grounds. Even though the regulators set different requirements for foreigners, his best bet goes to them penetrating the market.
He said that they must prepare complementary services to counter the competition while studying who will be interested in the market.
"We will conduct research", said the CEO of Arifpay.
PUBLISHED ON
Dec 24,2022 [ VOL
23 , NO
1182]
Fortune News | Sep 14,2019
Radar | Feb 04,2023
Radar | Aug 20,2022
Fortune News | Apr 03,2021
Radar | Apr 03,2023
Radar | Nov 13,2021
Radar | Apr 03,2023
Commentaries | Oct 30,2022
Radar | Apr 03,2023
Fortune News | Nov 04,2023
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transportin...
Jul 13 , 2024 . By MUNIR SHEMSU
The cracks in Ethiopia's higher education system were laid bare during a synthesis re...
Jul 13 , 2024 . By AKSAH ITALO
Construction authorities have unveiled a price adjustment implementation manual for s...
Oct 5 , 2024
Not long ago, the sight of exchange bureaus in Addis Abeba was as rare as a cloudless...
Sep 28 , 2024
In the early 2010s, Ethiopian authorities found themselves at odds with the Internati...
Sep 21 , 2024
A nurse in Addis Abeba shares a cramped one-room apartment with three colleagues. Her...
Sep 14 , 2024
Successive regimes share a common legacy: a deep-seated commitment to education as a...