FEATURE
hub. This meant that all payment channels including
cards, ATM, POS, mobile, internet, voice, and their
functionalities had to be supported by the switch.
The end to end switch implementation was divided
into project stages and project phases. In the beginning
of the implementation, each bank took care of the
customisation of the interface based on specifications
provided by BPC. This was followed by two stages of
testing, namely system integration testing and user
acceptance testing.
The implementation was also divided into three
phases. The first phase involved go-live of two ATM
products including cash withdrawal, balance inquiry,
reversal; and go-live of six POS products including
pre-authorisation, purchase, refund, reversal, balance
inquiry, pre-authorisation completion. This was
completed in May this year after a duration of two
years and seven months. This was enabled by the
interoperability between the 18 banks and the central
bank. After completion of phase one, bank card
holders in Ethiopia are able to withdraw their money or
check their balance on any ATM deployed by any bank,
irrespective of the bank which issued their card.
Prior to go-live, the switch operations were pilot tested in
a production environment. The pilot testing was run for a
period of two months with limited number of card holders.
The next two phases are currently under
implementation and are running in parallel. Phase two
includes around 50 product functionalities and services
including additional ATM and POS functionalities,
mobile and internet and voice interoperability. Phase
three includes certification with international cards
schemes including Visa and Mastercard. EthSwitch
has an objective to work as international gateway for
all banks. When the project is fully completed, over 50
e-Payment products and services will be supported in
EthSwitch covering card delivery channels like ATM, POS,
mobile, internet, and voice. EthioPay is the brand given
to the National e-Payment Switch of Ethiopia.
According to Bekele, EthSwitch’s metric of success
for the project is the number of transactions being
processed through the switch system. The system
infrastructure for the interconnectivity between banks
and the central bank is designed for 100 transactions
per second. As per the current implementation the
system can operate at 50 transactions per second. At
present due to the user adoption curve the number
of transactions is still well below this mark. “Since this
capacity is quite high, we do not have any performance
issue,” explains Bekele.
Since May this year the number of inter-bank transactions
has been growing. This is expected to increase as
the Ethiopian population becomes aware of the
www.intelligentcio.com
Bizuneh Bekele, CEO EthSwitch.
EthSwitch objectives
• Establish a national central financial switch system
• Establish system for card payment and management
• Provide advisory services for member financial
institutions
• Provide call center service and maintain service level
agreement
• Provide card and retail payment switch and clearing
service
• Provide card production and personalisation services
• Provide gateway service for international card
payments
interoperability and ease of using cards in any bank’s ATM machine. Along the
way there have been some transactions declines due to connectivity failures and
those limitations are being addressed. Automatic reversal of transactions due to
power and dispensing failures has been tested and is currently part of the system.
However as the number of transactions scale, this operation will also need to
be monitored. There is also an online dispute resolution portal similar to those
maintained by the global card companies. “Reversal is a normal transaction it has
to happen. But it is ongoing work as we add transactions.”
Bekele also stresses that what has been implemented is just a platform. “A lot
of work has to be done to develop local markets and local products.” According
to the 2016 Brooking Financial and Digital Inclusion report only 22% of the
adult population has financial accounts in Ethiopia. This shows there is a lot of
potential for inclusion and diversification of banking products in the country.
Amongst the future activities is to include mobile as part of the financial
inclusion policy. Another active area is the recent launch of the domestic card
called EthioPay. Across a national population of 100 million, there are 2.5
million card holders and 40 million mobile users. Sufficient opportunity for
Bekele and his team in the time to come.
INTELLIGENTCIO
33