Ethiopia’s digital payments ecosystem has made notable progress, but a new survey shows that payment gateways and merchant payment channels are still constrained by weak infrastructure, limited business-account use and a heavy reliance on personal accounts rather than merchant-focused payment tools. The findings suggest that the problem is no longer simply whether digital payments exist, but whether they work well enough for merchants to use them at scale.
The April 2026 Digital Merchant Payments Ecosystem Observatory: Ethiopia Wave 1 Flagship Report says 58.8 percent of micro-enterprises accept digital payments, while 41.2 percent remain cash-only. But the report also finds that the sector is sharply divided between urban and rural areas, with adoption far higher in cities than in the countryside, where connectivity and infrastructure remain major barriers.
One of the biggest problems is that Ethiopia’s merchant payments are still flowing through personal accounts instead of business accounts. The report says fewer than 1 percent of mobile banking or mobile money users rely on merchant or business accounts as their primary payment-receiving channel, leaving transaction data largely invisible to credit providers and regulators.
That gap is important because the country’s merchant economy is already generating significant digital activity. The report says 44.5 percent of micro-enterprises would benefit from additional credit or capital, but only 10.8 percent borrowed in the previous six months, with most relying on family and friends rather than formal digital finance.
The study also points to onboarding bottlenecks. For mobile banking, 92.7 percent of merchants signed up by visiting a bank branch or agent office, while mobile money users also relied heavily on in-person onboarding. The report says that model is a barrier for micro-enterprises that operate six or seven days a week and cannot easily leave their businesses to open an account.
According to the survey, merchant awareness of digital payment services is still driven mainly by bank and agent representatives, while social media plays only a small role. That suggests payment gateways are not yet benefiting from the kind of digital discovery and merchant promotion that could broaden adoption more quickly.
The report says Ethiopia’s recent payments reforms, including the National Digital Payments Strategy Phase Two, the interoperable QR mandate and EthioPay-IPS, provide a stronger policy foundation. But it adds that these tools have not yet reached enough merchants to transform usage patterns, meaning the country is still in the early stages of building a truly merchant-driven digital payment market.
The findings point to a clear challenge for Ethiopia’s payment gateway providers: adoption alone is not enough. Unless merchants are onboarded more easily, business accounts become more useful and infrastructure improves outside major cities, digital payments may remain widespread in name but underused in practice.
