Expanding e-payments in Egypt

Safeya Mounir , Thursday 17 Sep 2020

Egypt is stepping up moves to encourage electronic payments by vendors and the general public as part of its digital transformation

Expanding e-payments
The government plans to decrease the dependence on cash (photo: Reuters)

The Central Bank of Egypt (CBE) and Federation of Egyptian Banks (FEB) have launched a joint campaign to raise awareness about the merits of electronic payments that aims to increase public interaction with points of sale (POS) and increase the use of quick-response codes (QR codes) and mobile wallets to facilitate daily transactions.

A statement by the FEB said vendors could acquire POS for free for a limited time, as well as QR codes. It said they could conduct free maintenance of the system through Banque Misr, the National Bank of Egypt, the Commercial International Bank, the African-Arab International Bank, Banque du Caire, the Bank of Alexandria and the Qatar National Bank.

The campaign targets people across the social and economic spectrum nationwide. It aims to promote electronic payments in a straightforward way as part of government plans to decrease the dependence on cash, said Mohamed Al-Etrebi, chairman of the FEB and president of Banque Misr.

The CBE has ambitious plans to promote electronic payments, kickstarting an initiative to distribute 100,000 POS countrywide by December 2020. The CBE would bear the cost of the machines, Al-Etrebi added.

Banks participating in the campaign are making facilities available to vendors to use POS and QR codes to provide the best financial services possible in the light of people’s preferences to pay electronically, he said.

FEB statistics show that Egypt’s banks had issued 17.3 million debit cards, 16.2 million prepaid cards, and 3.3 million credit cards by the end of March, and there are 88.3 million POS and 13.3 million ATMs nationwide.

In May, the CBE launched a campaign to promote electronic payments and decrease the dependence on cash as part of preventive measures against the spread of the coronavirus.

The Ministry of Finance is also seeking better financial inclusion by making financial and banking services available to the public electronically and decreasing the dependence on cash. This would reduce fraud and theft, increase the use of mobile wallets, and promote services online, said Mohamed Ibrahim, head of the automation unit at the ministry.

The initiative serves vendors who wish to use POS for free, since the system connects to a vendor’s account directly and without added fees, he said. He added that merchants who keep up with the electronic-payments system will find it easier to gain clients.

The government has already been moving towards electronic payments, and most government employees and pensioners cash their monthly incomes through ATMs, Ibrahim said.

After the approval of the regulations on non-cash payments, the government offered a six-month grace period for the introduction of non-cash payments. The same grace period has been provided to government authorities and private-sector companies so that they can introduce electronic payments to their employees without added fees.

A law passed by parliament last year obliges government and private-sector bodies to pay their financial dues and insurance subscriptions electronically and aims at the gradual transformation of all purchases into electronic payments in a bid to reduce cash transactions.

The law obliges government bodies and companies whose capital is entirely or mostly owned by the state to pay service-providers and contractors not on the regular payroll electronically if their fees exceed LE5,000, said Hamdi Hosni, head of projects at the electronic-payments unit of the Ministry of Finance.

The regulations allow government bodies to give incentives to people who pay electronically, including discounts of five per cent.

The Egyptian Federation of Chambers of Commerce is drawing up a list of vendors that do not pay electronically, said Ibrahim Al-Arabi, head of the federation, estimating these to add up to some five million. 

The federation is conducting studies with electronic-payments companies to sign protocols with all of them in order not to limit transactions to only selected companies, he said, adding that it intended to generalise the discounts available to vendors.

In addition to the protocols, courses will be launched in cooperation with the Chamber of the Digital Economy to train vendors to use electronic payments and raise public awareness about the country’s digital transformation.

*A version of this article appears in print in the 17 September, 2020 edition of Al-Ahram Weekly

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