Three Ethiopian private banks signed a Memorandum of Understanding to launch an ATM and POS network, in a move described as "the first significant cooperation between competing banks in Ethiopia 's fast-growing banking sector.
By signing the MoU, Awash International Bank S.C., Nib International Bank S.C., and United Bank S.C. Banks agreed, in principle, to launch the network, which would be managed and operated by the Ethiopia-based IT Service Outsourcing Company, Offshoring 2.0.
The joint venture will allow over one million of their customers to withdraw cash and make payments for purchases. The MoU signify gains both in quality banking technology and in cost-effective operations.
"It is not just about Card Payment System, the Fettan ATMTM network will provide unparalleled access and coverage for the rest of the population that are unbanked and under-banked,"Leikun Berhanu, President of Awash International S.C.said at the signing ceremony at the Intercontinental Hotel in Addis Ababa.
Another signatory, President of Nib International Bank, Amerga Kassa also backed the united way so as to reach maximum number of Ethiopian private bank customers.
"No single bank in Ethiopia can afford to provide extensive geographical coverage and access, or create the know-how to do this properly," he said.
"As a result this will lead to slow acceptance of Card Payment system by consumers, and it makes total business sense to unite," he added.
Fettan ATMTM will install over 140 ATMs and over 340 POSs at every branch of the Consortium Banks across Ethiopia including all domestic airports serviced by commercial service, shopping complexes and merchants.
"Through Fettan ATMTM easier adoption of business and technology innovation enables participating members to offer unprecedented transaction services to their customers anywhere 24 hours a day," Berhanu Getahun, president of United Bank said on his part.
The Fettan ATMTM network also aimed to lead sharing on a variety of other innovative products and services including 'Debit Cards", which the member banks' customers would be able to use to purchase goods in specified shops and hundreds of ATMs nationwide.
The signatories however said the Fettan ATMTM Consortium would develop detailed business proposals to be discussed with each bank's board prior to final decisions on investments and service implementation.
CEO and Founder of Offshoring, Technology Services PLC, Yemiru Chanyalew part said shared technology for banking and cash machine services are common in many parts of the world.
He said, since banks need to transact payments and communicate information efficiently and securely; the Fettan ATMYM Consortium planes to provide these services in Ethiopia .
"There are gains from economies of scale as fixed costs are shared across more transactions and more efficient technology can be used" he said Yemiru added they were not decided yet on technical platform, "but within six months, we plan to finish on the platform and will enter to the market with the technology." According to the Founder of Technology Services PLC who facilitated the formation of the Consortium, the preliminary figure invested for the networking would be around 40 million Ethiopian birr, subject to change given unpredictable market situations.
(Source: Daily Monitor)