By: Kanto Kai Okanta
The
Head of Visa Eastern Africa and Country Manager for Ethiopia, Yared Endale, has
called for a strategic shift from basic adoption to long-term sustainability in
Ethiopia’s digital payments ecosystem, citing the need to strengthen merchant
payments, infrastructure investment and payment economics.
Speaking during a panel discussion on digital payments, Mr. Endale said Ethiopia’s
digital finance journey has reached a critical inflection point, with adoption
levels showing strong momentum across the economy. He noted that about 80
percent of surveyed small and medium-sized enterprises are already using some form
of digital payment, while 23 percent are leveraging advanced acceptance
technologies. Nationwide digital payment volumes have also recorded an 80
percent year-on-year increase, alongside a 22 percent growth in digital
accounts.
Despite
these gains, Endale observed that nearly 70 percent of transactions remain
peer-to-peer and are often processed through personal accounts, even when they
are commercial payments. He said merchant payments account for only about three
percent of total transactions, limiting the generation of reliable transaction
data required for credit scoring and the delivery of value-added financial
services.
He
further highlighted infrastructure gaps, noting that fewer than 20,000
point-of-sale devices currently serve a population of more than 130 million
people. According to him, the absence of sustainable payment economics,
including a formal Merchant Discount Rate, continues to constrain long-term
investment in payment infrastructure.
The
Head of Visa Eastern Africa and Country Manager for Ethiopia stressed the need
to scale low-cost payment acceptance solutions such as QR codes and multi-rail
point-of-sale devices, establish sustainable payment economics to incentivize
investment, and equip merchants with digital tools for reconciliation,
inventory management and cash-flow visibility.
He
pointed to studies indicating that a strong transition from cash to digital
payments could increase Ethiopia’s gross domestic product by one to two percent
annually, while a sustained five percent annual increase in digital payments
over five years could reduce the size of the informal economy by between 11 and
13 percent.
Endale
said Ethiopia has made notable progress in digital payments, adding that the
next phase must focus on translating adoption into measurable economic impact.
He reaffirmed Visa’s commitment to supporting this transition through
partnerships with local fintech companies to scale point-of-sale distribution
using innovative device-financing models and to accelerate the growth of a
resilient and inclusive digital payments ecosystem.
