The National Bank of Ethiopia has issued a new directive that clears the path for e-payment options, effective 1st April 2020. The Bank said the directive is “important” to promote the safety and efficiency of the payment system.

Comprised of six parts and twenty articles, the directive dubbed “Licensing and Authorization of Payment Instrument Issuers Directive,” puts forward the importance of innovative payment instruments to increase the use of financial services, the need for establishing clear and enabling regulatory requirements to protect the interest of users of payment instruments, and the necessity of establishing clear and enabling regulatory requirements to protect the interest of users of payment instruments as a preamble.

As per the new directive, a person other than licensed financial institutions can now get a license to issue a payment instrument, upon application for the same to the NBE.

Applicants to the service, along with other requirements, will be required to have a minimum paid-up capital of 5 million birr, and pay a non-refundable investigation fee of 5,000 birr.

Once authorized by the National Bank, a “payment instrument issuer” may be allowed to provide these services: cash-in and cash-out; local money transfers including domestic remittances, load to a card or bank account, transfer to a card or bank account; domestic payments including purchase from physical merchants, bill payments; over-the-counter transactions; and inward international remittances. Furthermore, the payment instrument issuer may be allowed to provide micro-saving, micro-credit, micro-insurance, and pension products upon the written approval of the National Bank, the directive states.

Stipulating the requirement for electronic payments to be denominated only in Ethiopian birr, the directive also details mechanisms of electronic account management.

The National Bank maintains an overseer status of “payment instrument issuers, their systems, agents and outsourcing counterparties,” as per the directive.

You may find the “Licensing and Authorization of Payment Instrument Issuers Directive No. ONPS/01/2020" HERE.

Source: Licensing and Authorization of Payment Instrument Issuers Directive No. ONPS/01/2020, The National Bank of Ethiopia