Now over 1.2 million account holders of Awash International Bank, Nib International Bank and United Bank can access their account from a single ATM round the clock thanks for the initiative the banks have taken three years ago. A consortium of the three banks, Premier Switch Solution S. C. (PSS), aimed to provide shared Automated Teller Machine (ATM), Point of Sales (POS), Mobile Banking and e-Commerce launched its service officially last Thursday.
“The accomplishment of this project symbolizes our unity in a highly competitive business environment. Competition in the banking sector of the country should not be based on infrastructure that duplicates costs. It should be on service quality and tariff terms. That is what PSS has proved. There are 17 banks operating in the country. Operating our own ATM would be simply wasting the scarce resource of the country. We wouldn’t be able to find space to install machines in prime locations like the Hilton,” argued Brehanu Getaneh, President of United Bank and Board Chairman of PSS.
The company started its operation by installing 60 ATMs and 300 POS in major business districts. It plans to install 40 ATMs and 300 more POS every for the coming five years.
The share company that integrates the electronic payment system of the three banks was established in 2009 with 30 million birr capital. However, its capital swelled to 165 million birr on its way to commence operation. The three banks operate more than 200 branches throughout the county.
The board of the share company is considering incorporating other banks and microfinance institutions to its system either as a shareholder or on basis of service charge.
The three banks are some of the private banks that were established two decades ago when the financial sector was liberalized.
The banks signed a contract with S2M, Moroccan company that won the bid to create an electronic payment system in November 2011. The system developed by S2M will allow customers of any of the three banks to use their bank credit card to withdraw money from an ATM of any of the Premier Switch members.
It is the first time that banks have realized an integrated card payment system. The system is expected to increase the competitive edge of the banks.
The financial sector regulating arm of the government; the National Bank of Ethiopia is also developing a national payment system. The system will connect all the banks in the country so that customers can access their respective bank account from any given bank. To that effect, all the banks in the country established a share company called Ethio Switch.