The Race in the Ethiopian Fin-Tech Industry

The new payment directive was issued at the beginning of 2020 aiming to replace the old directive issued in 2012 that paved the way for many mobile money products like CBE Birr, Amole, and HelloCash. This new directive has also marked the start of the race to enter the payment gateway market first. But what is a payment gateway, and why is it so important? A payment gateway is a technology that captures and transfers payment data from the customer to the acquirer and then transfers the payment acceptance or decline back to the customer. And this allows businesses to accept payments online.

We have now seen many companies enter this competition and even get some great investments. But the race is not just between these startups; Ethio Telecom has also announced their new payment platform will be released soon. And banks are also a big part of this ecosystem. In fact, the new directive favors banks to be part of the ecosystem very much. And you can see this as Dashen Bank and Moneta Technologies (Amole) announce their e-commerce gateway on April 15. Abyssinia Bank has also announced its own e-commerce gateway recently.

As for the payment gateway startups, ArifPay from the founder of ZayRide had attracted a lot of traction when they raised $3.5M / 140M ETB from 31 investors in a private placement round. This is a big deal for Ethiopian startups as this kind of funding is unheard of. Another name we have been hearing is Chapa. Even though we did not see a public API yet, Chapa has been marketing their platform highly and even given out free integrations. PayWay has also started its marketing, but it doesn’t seem like their heading for the online payment gateway business. Apart from these new startups, there are also some veterans in the payment gateway business. YenePay has been giving these services since 2015 and can be considered as the one that paved the way for the FinTech industry in Ethiopia. HelloCash from BelCash has also been in the industry for a long time.

Let’s look at this race from the perspective of a developer or a startup in need of a payment platform. This race is very good and exciting for the whole Ethiopian tech industry as there was no way for startups to accept payments from their users online. 

At the moment, there are some ways you could accept payment online, but there are a lot of inconveniences involved. Most of the mobile money solutions, like Amole and CBE Birr, do not have a public way of integrating their platforms; you have to reach out and convince them to integrate their platform. Some others, like YenePay and HelloCash, have ways to integrate their payment solutions without almost no involvement from them, but they have fewer users than platforms like CBE and Amole. But we hope we will get a good solution that will help all startups out of this race.