ASSESSMENT OF OPPORTUNITIES AND CHALLENGES OF THE NATIONAL E-PAYMENT SWITCH SYSTEM: THE CASE OF ETHIOPIA

Abstract

Although there are gradual and continuous increases in the use of e-payment system rather than the actual dispensation of cash in Ethiopia, the adoption of integrated national e-payment switch system is at its infancy. The introduction of an efficient e-payment system ensures speed, convenience, reducing cost, lowering payment risk and directly affects the efficiency of the circulation of goods and services and overall development of the economy. The main objective of this study is to assess the major opportunities and challenges of adopting the national e-payment switch in the case of Ethiopia. The research is designed as an assessment on the payment system through eight selected commercial banks, as case study so that the findings can give insights to other commercial banks operating in the country. Both primary and secondary data were used as source of information. Questionnaires are used as main instrument to collect primary data, while secondary data were reviewed from various publications. Regarding methodology descriptive with survey method applied. The target population for the study is about 118 and sample size of 91 was considered for the study. Data was analyzed using SPSS tools and results are presented based on statistical mean and standard deviations value. The result from the analysis shows that, the national switch address capital intensive investment of commercial banks on acquiring an independent e-payment switch system, it becomes one of the means in the creation of cashless society in the country, and facilitate financial inclusion, where the unbanked population can get the service through it, which all these refers about its opportunities. On the other hand, poor infrastructure in the country, limited customer awareness about the national switch system and its services, resistance for change, operational risks, limited awareness on how to file disputed transaction and inefficient chargeback management are identified as the key challenges. The study concluded that, the adoption of the national switch has a number of opportunities, which supports the macro economy in general and the financial sector in particular, where it requires also to combat, the basic infrastructural and inefficient operational activates of the national switch operator for its smooth operation and achieve its fretful result.