Kacha Digital Financial Service becomes a national switch member after buying 10 million birr worth of shares from ETHSwitch.
On Tuesday August 30th, 2020 the two companies signed their agreement through their CEO’s, Abereham CEO of Kacha and Yilebes Addis EthSwitch’s CEO.
Kacha is Ethiopia’s first ever private mobile money service provider, “The financial sector reform and subsequent directives have paved the road for payment instrument issuers like Kacha,” said Abreham, adding, “On boarding Kacha to the national switch membership is realized after fulfilling all requirements including a license from NBE and buying shares at EthSwitch.”
EthSwitch is said to provide Kacha interoperability with the already built network of financial and payment industry that will enable any transaction, authorization, and clearing of payments and transfers to and from any of the existing financial services providers including banks and MFIs from a single interface.
“One of EthSwitch’s mandates is to contribute to the efficiency of the national payment systems and enhance its modernization and accessibility all over the country,” said Yilebes, EthSwitch’s CEO during the signing ceremony.
As the CEO indicated, financial companies are expected to buy 5 percent or 40 million birr of share from EthSwitch to be member and if they are not capable of buying the 40 million birr share, they can also buy shares equal to their 5 percent of subscribed capital. As indicated by the CEOs, Kacha has gone for the second option on its way to becoming a member.
Kacha is the first private mobile money provider in Ethiopia established with a 200million birr subscribed capital with 13 Ethiopian entrepreneurs.
Currently, Kacha is working on final preparation and piloting its platform before commercial launch. Once commercialized Kacha’s mobile money platform in collaboration with banks, microfinance institutions, and SACCOS will be able to provide cashless transactions through 30,000 agents on board across the width and breadth of Ethiopia.
Kacha’s services are said to include opening a mobile wallet account, cash in, cash out, fund transfer, bill payment, unsecured micro credits, direct payments, bill payments, fund transfer, airtime top-up, card payments, international remittance, micro saving, micro-insurance, and other innovative services, which will ultimately boost financial inclusion and speed up how companies access their funds and transactions.
The membership enables Kacha’s customers leverage payment acceptance devices deployed by banks and payment system operators across merchant locations, to issue payment cards to its customers, which they can use on all ATM and POS terminals throughout the country
EthSwitch, established in 2011, is a share company fully owned by all banks and several MFIs and a payment instrument issuer in Ethiopia. It was established mainly to provide simple, affordable, secured, and efficient e-payment infrastructure services to retail payment service providers, and through them, to end users in Ethiopia.
It is indicated that currently, EthSwitch is rolling out multiple multimillion-dollar projects aimed at transforming Ethiopia’s payment ecosystems through instant payment gateway, and shared wallet platforms.