Thursday, February 29, 2024
BusinessCentral bank grants ArifPay first Fintech license

Central bank grants ArifPay first Fintech license

The company has a paid-up capital 140 million birr

The National Bank of Ethiopia (NBE) gives the first Fintech license to ArifPay, enabling it to become a pioneer private payment systems operator and Gateway service provider. ArifPay, established to run an electronic payment platform, was designed for use by merchants, banks and consumers in Ethiopia to transfer money, make invoices, or pay taxes.

Habtamu Tadesse, founder and CEO of ArifPay, confirmed to the The Reporter that the NBE has given the first Fintech license to his company. The license will help the company activate Payment systems operator and Gateway services, he added. The company started the licensing process as soon as the central bank issued a new directive on issuers of payment instruments, allowing local non-banking organizations, including mobile network operators, to offer mobile money services.

While the company was the first to apply for the license and had been almost a year since it filed an application, there were obligatory issues to be undertaken in order to secure the license. Capital requirement and investors nationalities were the first two necessities that needed to be fulfilled. The question on whether the society has the know-how about the technology is the other condition, along with presenting the business plan of the company.

There are three to four payment system operator options issued in the directive. Any person other than a financial institution, who intends to engage in the provision of payment processing, personalization of payment cards and point of sale machine, among others, must be licensed by the central bank as a payment system operator.

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As an applicant intending to be licensed as a payment system operator should have a paid-up capital of 300 million birr. For a national switch operator and switch operator, the paid-up capital has to be 40 million birr. On the other hand, if it is an automated teller machine operator, a paid up capital of 20 million birr is needed, while it is 10 million birr for a point of sale device operator and three million Birr for a payment gateway operator.

According to Habtamu, since ArifPay applied and secured licenses for the payment system operator and gateway services, the sum of the two reaches 13 million birr, though this amount is not enough to run the business. Considering this, promoters of ArifPay collected a paid-up capital of 140 million birr, having 42 shareholders, according to Habtamu.

So far, the company announced the signing of a Memorandum of Understanding with Derash, a bill payment platform developed by INSA, in order to provide application based bill payment platforms across Ethiopia.  ArifPay has also inked a partnership agreement with Abay Bank to introduce mPOS system across the country.

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Video from Enat Bank Youtube Channel.

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