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Mastercard and EthSwitch To Revolutionize Ethiopia’s Payments System With Digital-First Partnership

April 9, 2023

Ethiopia is on the path to a cash-lite economy thanks to a new partnership between EthSwitch and Mastercard. The national payment switch, which is fully owned by banks in Ethiopia, will work with Mastercard to provide a faster, more secure digital payment solution for financial institutions in the country. The partnership will allow for the fast and secure transfer of funds both domestically and cross-border.

EthSwitch CEO Yilebes Addis said the partnership would play a critical role in advancing Ethiopia’s financial system and support the economy with an improved flow of remittances in the country. Customers will enjoy instant payout capabilities and secure transactions as they will be enabled to send and receive funds at any moment with the support of the partnership.

The partnership marks the second collaboration between the two entities in the last six months. In November of last year, the two institutions teamed up with Oromia Bank to provide all of the bank’s ATMs in Ethiopia to accept Mastercard debit, credit, and prepaid cards. EthSwitch officials believe that this latest partnership will give a boost to efforts to modernize the national payments system and enhance financial inclusion in the country.

Ethiopia is quickly moving into the digital economy, and EthSwitch is striving to achieve its strategic goals, which substantially contributes to the success of Digital Ethiopia 2025, National Digital Payments Strategy, and National Financial Inclusion Strategies. The partnership with Mastercard will help EthSwitch meet these goals and bring financial inclusion to the millions of Ethiopians who need it. Mastercard will provide advisory and technical support to advance EthSwitch’s digital-first strategy as per local and global best practices.

EthSwitch CEO Yilebes Addis called the partnership a significant step towards a modernized payment system, and Dimitrios Dosis, President of Eastern Europe, Middle East, and Africa at Mastercard, said that the partnership would facilitate digital remittances in the country, bringing financial inclusion to millions of Ethiopians. With the rapid increase in ATM usage in Ethiopia since its deployment in 2001, this partnership is an exciting development on the country’s journey towards becoming one of the most digitally connected countries in East Africa.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

With $3.8M Capital, Newly Founded Ethiopian Fintech Kacha Is Now Part Of EthSwitch

September 1, 2022

Kacha Digital Financial Service, Ethiopia’s first private mobile money service provider, has joined EthSwitch, the national switch operator. The two parties signed a contract today, August 30th, 2022, at the Hilton Hotel.

EthSwitch will enable Kacha interoperability with the existing financial and payment industry network, allowing any transaction, authorization, and clearing of payments and transfers to and from existing financial services providers, such as banks and MFIs, to be performed through a single interface.

“We are happy and proud to welcome the first private mobile money service provider and facilitate its interoperability with the payment ecosystem. I would like to extend a warm welcome and congratulations to Kacha,” said Yilebes Addis, EthSwitch’s chief executive officer, during the signing ceremony.

“For a financial institution, accessibility and acceleration of transactions through interoperability are major priorities, and I am glad Kacha has succeeded on time and before going live,” said Abreham Tilahun, CEO of Kacha DFS.

Here’s What You Need To Know

Kacha’s mobile Wallet system is now compatible with existing and planned payment systems thanks to its membership in EthSwitch, allowing its clients to move payments from and to other financial institutions using their mobile wallet and accounts.

Kacha is now working on final preparations and platform testing ahead of its commercial debut. Once commercialised, Kacha’s mobile money technology would be able to facilitate cashless transactions through 30,000 agents onboarded across Ethiopia in conjunction with banks, microfinance institutions, and SACCOS.

Opening a mobile wallet account, cash in, cash out, fund transfer, bill payment, unsecured micro credits, direct payments, bill payments, fund transfers, airtime top-up, card payments, international remittance, micro saving, micro-insurance, and other innovative services are all part of Kacha’s plan.

Kacha became the first private firm to get a mobile money licence from the National Bank of Ethiopia in July 2022, with a subscribed capital of birr 200 million.

Eth-Switch, a company controlled by a consortium of all banks, including the central bank, was founded in 2011 to provide retail payment service providers and, via them, end users in Ethiopia with easy, inexpensive, secure, and efficient e-payment infrastructure services.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

Ethiopia’s e-Payments Provider EthSwitch, Secures $2.33 million Grant from the AfDB

March 11, 2021

Ethiopia’s leading electronic payments platform has secured a grant from the African Development Bank (AfDB) which will help electronic payments in Ethiopia to get a facelift with the approval of a $2.33 million grant by the African bank. EthSwitch which is the official backbone for e-payments providers and end-users in the country runs platforms such as Ethiopay, the card scheme that helps Ethiopian banks issue payment cards. As the country’s national payment switch, EthSwitch also handles dispute resolution for financial institutions.

Ethiopia’s central bank, the National Bank of Ethiopia facilitated EthSwitch’s establishment in 2011 and owns a 46% stake in the company, while commercial banks (about 17 of them) in Ethiopia own the rest. The intention was to create a modern national payments system and accelerate financial inclusion in the country. Since then, EthSwitch has created a common network for ATMs and POS terminals operated by all Ethiopian banks.

AfDB’s grant to EthSwitch comes from the Africa Digital Financial Inclusion Facility (ADFI), a fund launched in 2019 in partnership with the French Development Agency, the French Treasury, the Ministry of Finance of the Government of Luxembourg, and the Bill and Melinda Gates Foundation. ADFI aims to bring banking services to Africa’s 332 million unbanked people. The EthSwitch project is expected to simplify the distribution of social benefits, pensions and other government payments, as well as power e-commerce, transport systems, and utility bills payments.

According to Sheila Okiro, ADFI Fund’s coordinator, the EthSwitch project has the potential to “change the digital payments landscape in Ethiopia.” The project is to be implemented over three years, according to AfDB’s statement. The grant comes at a time of liberalization in Ethiopia’s technology industry.

In February, the Ethiopian Communications Authority (ECA) announced that it had shortlisted six providers of telecommunications services for a private telecoms license. Ethiotel, the state-owned company, has been the sole provider of internet and telephone services pretty much since it was established in 1952. Innovation in digital payments has proceeded gradually in Ethiopia. Until September 2020, Ethiopians could not use their cards to buy goods and services at POS terminals operated by any bank.

That situation changed after the National Bank of Ethiopia commercialized the process of buying POS machines. After achieving that interoperability milestone, EthSwitch is now reportedly trying to create a similar system for mobile and internet banking that could enable transactions between accounts, between wallets, and from an account to a wallet.

Ultimately, the EthSwitch project could increase the overall involvement of private companies in Ethiopia. EthSwitch’s shareholding structure makes it possible for banks, microfinance institutions and non-banks to have a share and a say, subject to the National Bank of Ethiopia’s supervision. AfDB’s funding for EthSwitch is one of two ADFI grants for national technology infrastructure projects in Africa. The bank approved a $1 million grant for AI-based systems for processing customer complaints. The beneficiaries are the central banks of Ghana and Rwanda, and the Competition and Consumer Protection Commission of Zambia.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry