Ethiopia Raises Mobile Money Capital Rule
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The National Bank of Ethiopia (NBE) has doubled the minimum capital requirement for non-bank mobile money operators, setting it at 100 million birr from 50 million birr.
This move follows the repeal of the 2020 directive on Payment Instrument Issuers (PIIs) and took effect on May 12. The new regulation applies to all current and prospective PIIs, entities licensed to issue and manage electronic money without being banks.
The change comes as mobile money usage expands across Ethiopia, driven by platforms like Telebirr and government-led efforts to improve access to financial services. The sector, however, has faced challenges including limited interoperability between providers, market concentration, and inconsistent regulatory oversight.
In addition to the capital increase, the directive requires all PIIs to support interoperability across digital wallets.
By November 2025, wallet-to-wallet transactions must be processed through EthSwitch, the national switch, or other systems licensed by the NBE. Transfers outside these approved frameworks will not be allowed.
This requirement is intended to eliminate closed-loop systems that previously restricted transactions to individual platforms.
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The directive also updates operational limits for Level 2 digital wallets, which allow higher transaction thresholds for verified users. These wallets will now face restrictions on daily balances, person-to-person (P2P) transfers, and person-to-merchant (P2M) payments.
P2M transactions conducted via Ethiopia’s national QR code system will also be subject to newly imposed thresholds, though specific limits have not yet been published.
Analysts expect the capital requirement hike to raise the entry barrier for new fintech startups while encouraging better risk management among existing players.
The changes are also seen as part of Ethiopia’s ongoing financial sector reforms, including the rollout of a national digital ID system and plans to liberalize banking services to foreign investors.
Ethiopia began licensing non-bank mobile money operators in 2021, later than many other African countries. Since then, mobile wallets have gained tens of millions of users and reshaped payment systems in the country. However, concerns over data protection, consumer safety, and system stability have grown alongside this expansion.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.
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