Mastercard and digital service provider Kifiya have partnered to introduce a simple, secure and convenient digital solution that will ultimately allow citizens to pay for all bills in one location in Ethiopia. The partnership will impact millions of Ethiopian citizens living abroad, as well as those living in the East African country.
The digital solution, accessible on computer and mobile devices, will further streamline the experience of paying for bills by letting citizens both within and outside the country’s borders make immediate digital payments – a major benefit for citizens of Ethiopia, which has one of the continent’s highest proportions of citizens living outside the country.
According to the World Bank, inbound remittance flow to Sub-Saharan Africa reached USD 36bn in 2015. As one the highest receiving countries in Africa, next to Nigeria, Ethiopia’s remittance flow is estimated to be between USD 3 and 5bn annually; of which, close to USD 2bn comes through informal channels. A recent study commissioned by Kifiya in the United States showed that the majority of African diasporas living across the world would like to contribute to pay for household expenditure for their loved ones back home.
This service offers a convenient, affordable, secure, simple, and digitally driven solution that enables families and friends abroad to pay for bills using their debit cards, credit cards, mobile wallets, or directly from their bank account from anywhere in the world.
The roll-out of the solution will comprise multiple phases, with Mastercard and Kifiya’s strategic partnership specifically focusing on the first phase involving utility payments. It will enable Ethiopian diasporas to pay for the utility bills of friends, family and relatives facilitated by Mastercard’s secure international payment processing capability, Mastercard Gateway Services.
As part of the second phase, Kifiya and Mastercard will move to include micro insurance payments, educational expenses and international airtime to the platform. Once the Mastercard payment gateway is facilitated the local recipient will receive a text confirmation from Kifiya’s integrated payment platform and can pick up a hardcopy receipt at any of the Lehulu centres across the country and other agent locations.
“We are excited about launching a modern and global remit to pay platform. We are equally excited in launching the service in partnership with Mastercard, which aims to digitally including 100 million people in Africa by 2020. We believe that such a service is the first of its kind and hopefully will create a new class of remittance solutions,” said Munir Duri, CEO of Kifiya Financial Technology. “It is a great step for an Ethiopian company to start the journey of providing digital payment services throughout Africa in collaboration with Mastercard.” Duri added.
“There are currently approximately three million Ethiopians living outside of the country that assist family members back home to pay bills, which current money transfer services fail to adequately address because they are expensive and there is a lack of control as money is not directly paid towards the service provider in question,” says Chris Bwakira, Vice President and Area Business East, East Africa at Mastercard. “With this solution, family members living overseas will now be able to pay bills directly, with the peace of mind that comes from knowing the money is being used where intended.”
Bwakira adds that by implementing a solution that helps to digitise Ethiopia’s bill payment ecosystem, Mastercard and Kifiya are working to displace cash’s stronghold in Africa and make the monthly obligation of paying bills less of a burden and threat by making the entire payment process digital, reducing transaction costs and removing risk.
Digitising the ecosystem will unlock the potential to introduce other solutions in the future, including unified bill payments for amenities such as mobile phone services and travel visa applications. Ultimately, building stronger and safer cashless bill payments systems will empower citizens to focus on what is important to them by cutting down on the time they spend traveling between locations to make payments and eliminate the danger of carrying large amount of cash for bills.
Importantly, it also speaks to the Ethiopian government’s goals of improving the lives of its citizens by providing access to convenient, safe and fast financial solutions – part of the country’s financial inclusion goals that feed into its overarching development goals of ending poverty, among others.
Making payments digital is a critical step in driving the inclusive growth in Ethiopia, because of its ability to financially empower even those who were previously excluded, through easy-to-access and use solutions. “Through vital partnerships such as the one with Kifiya, Mastercard is dedicated to introducing these kinds of digital solutions that make a real difference in people’s lives,” concludes Bwakira.