Mastercard and Kifiya Financial Technologies – digital financial service provider in Ethiopia – have partnered to introduce first of its kind consumer to business digital remittance payment platform focusing on Africa with the first roll out in Ethiopia.
The roll-out of the solution will comprise multiple phases with Ethiopia being the first country in Kifiya and Mastercard’s strategic partnership specifically focusing on utility payments and moving to include as micro insurance payments, educational expenses, and international airtime. It will enable Ethiopians living abroad to pay for their utility bills safely and quickly through the digital bill presentment of friends’ and relatives’ monthly bills.
Remittance to Sub-Saharan Africa hit 36 billion USD in 2015, according to World Bank data. As one the highest receiving countries in Africa, next to Nigeria, Ethiopia’s remittance flow is estimated to be between 3-5 billion USD annually; of which, close to 2 billion USD comes through informal channels. A recent study commissioned by Kifiya in the United States showed that majority of African Diasporas living across the world would like to contribute to pay for household expenditure for their loved ones back home.
The new service offers a convenient, affordable, secure, simple, and digitally driven solution that enables families and friends abroad pay for bills using their debit cards, credit cards, mobile wallets, or directly from their bank account from anywhere in the world. Once the online payment transaction facilitated by Mastercard’s secure international payment processing capability, Mastercard Gateway Services is complete, the local recipient will receive a text confirmation 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 with their aim of digitally including 500 million people by 2020. We believe that such a service is the first of its kind and hopefully will create a new class of remittance product” said Munir Duri, CEO of Kifiya Financial Technology. Duri goes on to add:
“It is a great step for an Ethiopian company to start the journey of providing digital payment services throughout our Africa and to that our collaboration begins with Mastercard is key”.
“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 bill in question,” says Chris Bwakira, Vice President and Area Business East, East Africa at Mastercard. “With the 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 hazard by making the entire payment process easier and more efficient, reducing transaction costs and removing risk through direct and electronic payment.
Digitising the ecosystem will unlock 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 walking between locations to make payments, as well as eliminate the danger of paying bills using cash.
Importantly, it also speaks to the Ethiopian government’s goals of improving the lives of its citizens by providing them with 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.