Premium Switch Solution Share Company (PSS), a consortium formed by three private banks, is to introduce its electronic banking (e-banking) operations with the introduction of 60 Automatic Teller Machines (ATM) and 300 Point of Sale Machines (PoS).
The share company established in 2009 with 30 million birr capital by three private banks, Awash International Bank (AIB), United Bank and Nib International Bank to work in partnership with their e-banking has cost close to 100 million birr to commence the initial operation.
The new electronic banking scheme that will allow customers to use any credit of the three banks will start the operation before the end of the budget year, which will end on July 7, 2012.
According to Tsehay Shiferaw, President of AIB, the share company will expand the number of ATM and PoS in the coming year. He said that to automate the Switch company system, the banks have expanded their capital amount by five-fold from their initial investment.
The board chaired by Berhanu Getaneh, President of the United Bank, is also evaluating how to get other banks involved in the share company. The capacity of the Switch is made in a way that it would allow other stakeholders to join in. “The board is talking about forming criteria to include other financial institutions in the share company,” the president added. He said that two options are being considered; to be included as a shareholder or to buy service from the share company.
The three banks are some of the major private banks that have been established in the country since the free market economy was introduced nearly two decades ago.
These banks have a strong financial capacity and large numbers of branches.
The three banks formed PSS with the aim of introducing a card banking system in which they would be connected.
Currently, the interfacing of these three banks is the only task that remains to be done; as it is scheduled to commence operation in June. All other major works have been completed. Awash, United and Nib banks signed a contract with S2M, a Moroccan company that won the bid to create an electronic payment system in early November of last year.
The S2M system will allow customers of any of the three banks to use their banks cards to withdraw money; from an ATM of any of the Premier Switch members.
It is the first time that banks have joined together to develop an integrated card payment system and it may well give them a competitive edge over other banks outside the network.
Tsehay also said that it has taken a year to move the company to where it is now and if everything goes according to plan, the company will start giving service to its customers within the coming nine months, with debit card service to be introduced within six months.