Ethiopia has outlined plans to implement the country’s draft second National Digital Payments Strategy for 2026–2030, presented on Monday, which will enable outbound cross-border remittances.
- Ethiopia has outlined plans to implement the country’s draft second National Digital Payments Strategy for 2026–2030, presented on Monday, which...
- The plan would evaluate the nation’s foreign exchange position and related risks before the government issues explicit policy guidelines on...
- Introduction of Ethiopay to enhance cross-border transactions A significant highlight of the conference was the introduction of Ethiopay, an instant payment...
- Expansion of Ethiopian Instant Payment System The draft strategy calls for expanding the Ethiopian Instant Payment System to manage 30 per...
Keep reading for the full breakdown on cross-border remittances — everything you need to know is covered below.
The plan would evaluate the nation’s foreign exchange position and related risks before the government issues explicit policy guidelines on outgoing retail payments. If circumstances permit, the central bank will issue an “Outbound Remittance Directive” that will allow licensed banks, payment service providers, microfinance organisations, and payment infrastructure providers to offer low-value cross-border transfers through digital banking, mobile wallets, and cards.
The draft plan was introduced on Monday morning at the second Ethiopian Digital Payment Conference held at the Skylight Hotel. Gov. Eyob Tekalign (PhD) of the National Bank of Ethiopia and Deputy Prime Minister Temesgen Tiruneh opened the event.
Introduction of Ethiopay to enhance cross-border transactions
A significant highlight of the conference was the introduction of Ethiopay, an instant payment system developed by the national switch operator, EthSwitch.
The platform serves as the foundation of Ethiopia’s digital payment ecosystem, providing a secure, interoperable infrastructure for bulk payments, cross-border transactions, QR code payments, and person-to-person transfers.
Plan to improve Ethiopia’s financial infrastructure
The revised plan seeks to improve financial infrastructure, lower barriers for marginalised groups, and increase the use of digital payments. It expands on the rapid growth of Ethiopia’s digital finance industry. From less than 1 million in 2020 to over 128.5 million by the end of 2024, the number of mobile money accounts has increased dramatically. By the middle of 2023, there were more than 102.8 million digital accounts overall, and the 2023–2024 fiscal year saw transaction volumes of 9.7 trillion Birr, exceeding the value of cash transactions. Between 2019 and 2024, the number of mobile money transactions alone rose by 34,631 per cent.
This expansion is primarily the result of domestic innovation and regulatory changes. In May 2021, Ethio Telecom launched its telebirr service, which quickly gained prominence. The first major foreign competitor appeared in 2023 with the launch of Safaricom’s M-PESA.
Chapa, Santimpay, and Arifpay are local payment service providers that have increased competition and choice. By allowing foreign businesses to operate digital payment systems, the National Bank of Ethiopia amended the National Payment System Proclamation in 2023, thereby spurring innovation and competition.
Expansion of Ethiopian Instant Payment System
The draft strategy calls for expanding the Ethiopian Instant Payment System to manage 30 per cent of digital transaction volumes, implementing the universal adoption of ISO 20022, and creating a centralised national data exchange.
All bank accounts are anticipated to be connected to Fayda, the country’s digital identity, by 2030. Additionally, the strategy aims to have 80 per cent of government-to-person payments processed digitally.
Plan to bridge the digital divide
The government aims to close the access and usage gaps between rural and urban users to 8 percentage points and between men and women to 3 percentage points.
The number of female agents is expected to rise from 5 per cent to 40 per cent, supported by programmes for young people and those with disabilities, as well as by efforts to bring more SACCOs, microfinance institutions, and VSLAs onto shared platforms.
The number of digital payments per adult is expected to increase from 54 to 275 per year, and their value is expected to reach 750 per cent of GDP.
In the transportation, agricultural, and health sectors, the strategy places a strong emphasis on digitisation, QR code standardisation, and merchant acceptance. Seventy per cent of adults are predicted to own smartphones.
Reducing digital literacy barriers to about 12-13 per cent and increasing public awareness of digital payment services to 80 per cent of adults are other goals. Five thousand agents and community leaders will be trained as part of the plan, which also calls for the central bank to increase internal capacity through continued research and skill development.
Plans to reduce digital fraud rate
It is anticipated that standardised national fraud reporting and increased cybersecurity compliance will significantly reduce the fraud rate to 0.0008 per cent of the transaction value. The plan includes faster dispute resolution and minimal user experience requirements for all financial institutions.
Additional steps include increasing e-commerce to 4 per cent of digital payments, facilitating cross-border payment connections, granting licences to new payment service providers, and broadening access to digital credit, savings, and insurance products. Additionally, the framework promotes nondiscriminatory access to payment infrastructure and introduces competition policies.