Following the authorization from the National Bank of Ethiopia after a successful pilot test, EthSwitch S.C, Ethiopia’s National Switch announced the commencement of interoperability of Digital Wallet, Mobile & Internet Banking systems run by banks, Microfinance Institutions (MFIs), and E-money issuers.
The interoperability enables customers of banks and MFIs & e-money issuers with a digital wallet, mobile & internet banking & accounts to send funds from one institution to another.
The interoperability includes transfers from a bank account to a bank account, wallet to wallet, wallet to bank account, and from bank accounts to a wallet using internet-based and USSD channels as well as smartphone applications.
According to the statement from EthSwitch Nine banks and one MFI have participated during the pilot period executing over 125,000 transactions worth 1.1 billion birr. More banks, MFIs, and digital wallet providers are on their way to completing their technical integrations and testing.
As evolutionary progress from previously attained ATM and POS interoperability, Digital Wallet, Mobile & Internet banking interoperability, technically termed as interbank Person to Person (P2P) account transfer, is a significant step in achieving Ethswitch’s primary goals of Attaining Complete Channel Interoperability.
Interbank P2P account interoperability is a mechanism that enables customers of banks, microfinance & digital wallet providers to transfer funds to others or between their own accounts from their mobile devices from anywhere at any time between different financial institutions.
This platform is also expected to be used for payments, especially long-distance transactions due to the convenience and assurance it provides for the transacting parties.
“Digital Banking Interoperability is a significant step in the modernization and integration of payment systems in Ethiopia, which will help financial institutions leverage existing technology with Ethswitch to provide efficient services, increased reach, and smooth customer experience” Yilebes Addis stated.
It ultimately enhances the digital banking uptake by customers and increases the financial institutions’ resource mobilization and customer service monetization capability, he added.