Ethio telecom has requested the National Bank of Ethiopia to increase rates of maximum balance that should be available in mobile accounts of customers.
As part of the digital payment strategy and digital inclusion, the government has provided digital payment strategies and mobile money enablers’ cross-border remittance through mobile money or wallet accounts used for both sending and receiving ends of the transfer. However, according to the national bank regulation of mobile and agent banking service directive no FSI /01/2012, the limits of the maximum balance that should be available in a mobile account of a person with a financial institution at any time is not to exceed from 25,000 birr while daily mobile banking transaction that involves debiting of an account by a person with a financial institution is not to exceed from 6,000 birr.
Since the directive is limiting the nation wide mobile money platform Telebirr and its customers from making huge transactions Ethio telecom has submitted its proposal to the central bank, according to sources and the central bank as part of its digital payment strategy is working to improve the directive.
When central bank improves the directive, Telebirr is said to start to enact transactions such as payment of employees’ salaries, business to business transactions and other bulk payments.
Ethio telecom is aggressively working in giving new services as seen by starting international remittance, after receiving a green light from the NBE and the service is expected to start within one month. Ethio telecom is also working to integrate its system with its international partners of which the process is under pipeline of testing.
When it starts giving the service, telebirr will enable customers to receive money from abroad. Both registered and unregistered telebirr users can receive international remittance. Customers can conveniently receive money via their mobile number from those living abroad.
Currently, there are 9.5 million and growing subscribers of telebirr with 1.14 billion birr being transacted through telebirr. So far, 26,442 agents have been providing telebirr services across the country with 8 banks being integrated with the platform.
It is to be recalled that, the Telecommunications CEO said that the new service, telebirr, will mark a shift for Ethiopia, where the banking system is seen as inefficient with 19 commercial banks serving a population of about 115 million. To this end, within the coming five years about 50 percent of the total Ethiopian economy or 3.5 trillion birr in transaction is expected to go through tele birr.
Today, in Ethiopia, more than 90% of all retail transactions are estimated to be conducted in cash. Low and high-value transactions are most often carried out in cash, with few exceptions. Cash Purchase Orders (CPOs) and checks are used as alternatives to pay suppliers in the corporate public and private sectors, as well as high-value goods for consumers. Corporate wages from the public and private sectors, as well as pension plans, can be paid by electronic transfer if within the same bank and it is common for the government, donors, and the private sector to ask their employees to open bank accounts at the employer’s banking institution so that the employer can electronically transfer wages. Mobile money is a relatively new concept in Ethiopia, and it is used mostly to buy airtime, but all this will change when NBE revises its directive as per the proposal of Ethio-telecom as more and more functionality will be added when the limits of financial transactions are increased.