The National Bank of Ethiopia (NBE) has announced a new directive requiring all payment service providers in Ethiopia to implement standardized QR codes for digital payments starting December 1, 2024.
This initiative seeks to unify the varied QR systems currently in use, establishing a single, standardized format that adheres to NBE’s guidelines. Ethiopia’s digital payment ecosystem has witnessed rapid expansion, underscored by the National Bank’s recent report showing over 2.7 billion digital transactions totaling more than Birr 9.7 trillion the 2023/24 fiscal year.
With digital payment accounts including mobile and internet banking now exceeding 198 million, the country is steadily moving towards a cashless economy. The new QR code standard is set to transform merchant transactions by ensuring secure, interoperable, and consistent payment experiences nationwide. By simplifying user interactions, bolstering security, and encouraging broader adoption among merchants, this measure aims to foster an inclusive digital economy across Ethiopia.
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The initiative aligns with the goals of Ethiopia’s National Digital Payment Strateg (2021-2024), which has contributed to a robust regulatory environment and rapid growth within the digital payments landscape. EthSwitch, a national switch fully owned by all banks in Ethiopia, will oversee the QR code interoperability infrastructure, working under NBE’s supervision to promote a seamless and uniform payment experience for users and merchants alike.
The standardized QR codes are expected to improve the accessibility, security, and interoperability of digital payments, contributing to Ethiopia’s economic growth through a more efficient and inclusive digital payment system.
Ethiopia is poised to revolutionize its development trajectory with a bold digital transformation. The “Digital Ethiopia 2025” strategy is the blueprint for this ambitious endeavor, aimed at unlocking inclusive prosperity. The “Digital Ethiopia” roadmap outlines the strategic vision and initiatives aimed at transforming Ethiopia into a digitally driven economy by 2025.
Ethiopia’s National Digital Payments Strategy (NDPS) for 2021-2024 further propels the digital payments agenda. The NDPS aims to modernize the country’s retail payment system, promote financial inclusion, and create a cash-lite economy. It is aligned with the government’s broader reform agenda and the Financial Sector Reform Strategy
According to reports, digital financial transactions have been growing rapidly in Ethiopia since 2019 in terms of both volume and value of transactions across all channels, including ATM, POS, mobile banking, and internet banking. As of June 2023, end users in Ethiopia had made digital payments worth more than Birr 4.7 trillion ($82 Billion). That is three times the value made in 2022. The number of digital transactions reached 1.2 trillion.
Furthermore, mobile money has shown the greatest growth in number of transactions, with a six-fold increase in just one year, from 48 million transactions in 2022 to 298 million transactions in 2023.
The Digital Transformation Strategy adds a sense of urgency, stakeholder mobilization, and coordination of the ongoing initiatives to develop the payments ecosystem and enable financial inclusion. The strategy, informed by a digital economy gap assessment and stakeholder engagement, aligns with Ethiopia’s national development vision and priorities.
The outlook for the growth and advancement of Ethiopia’s digital payments eco-system appears more promising than ever.