Mobile Financial Services

(MFS)

Agent Banking Department

September 2020
 Learning Objectives
• To provide theoretical knowledge on the areas of Mobile Financial services (MFS);
• To acquaint with mobile financial service performances on the current context of the
country;
• Introduce newly acquired mobile financial service (mobile money products) of the Bank
and create strategic alignment; and,
• Help trainers/branches articulate exactly what is expected from the participants to do by
the end of the training.
Outlines
 The following are training outlines of MFS
 Practices of mobile financial services (global and national experiences
 Mobile Payment Ecosystem
 BoA’s Mobile Money service (Agency Banking)
 Benefits of MM
 Main Products/services of BoA’s MM Solution
• Customers (Public Side)
• Agents
• Merchants
• Billers, and
• Bulk Services
Mobile Financial Service (MFS)
Introduction

Mobile Financial Service (MFS) is the use of a mobile phone to access

financial services and execute financial transactions.

Mobile financial services is a digital technology that encompass mobile

payments, mobile money and mobile banking. Mainly it involves both mobile
banking and mobile money services.

Mobile banking refers to an actions performed on a traditional bank account.

These actions involve obtaining account information, and transacting on
accounts.
Mobile Financial Service (MFS)…

Mobile money is a stored value in a wallet account that is accessed from the user’s
mobile phone.

Mobile payments are payment for goods and services using a personal mobile device as
the transaction terminal. Mobile payments can use a traditional bank account or a mobile
money account.
 Back ground of MFS
A) Global Experiences
• The earliest mobile banking service used SMS which was then known as SMS banking.
• In 2009, RBS (Royal Bank of Scotland) launched a quick statement through a text on
demand and a mobile iPhone banking app that was available on the app store.
• In May 2011, the first fully functional banking app was launched by RBS and it was only
available for Apple devices. Lately, it becomes functional on Blackberry and Android users
phones as well.
• Out of the total globally registered mobile money users, around 45.6% is found in sub-
Saharan Africa (GSMA state of the industry report on mobile money 2018).
• Using mobile phones people transact every corners of the world on the contexts of mobile
money and mobile banking services.
 Back ground of MFs….
• Globally, number of mobile money registered accounts reached 1.04 billion over USD 1.9
billion transactions processed daily (GSMA, 2019).
• In 2019, 50 million sub-Saharan Africans created a mobile-money account via a mobile
phone, representing a 12% increase compared to 2018 and bringing the total number of
users up to 469 million across the region. An estimated 181 million of them are active
users.
• The total number of transactions carried out in 2019 is 23.8 billion which exceeds USD
456 billion.
• Sub-Saharan Africa beats all records in the sector, as this figure is 3.5 times the value
of transactions recorded in South Asia, the second-highest ranked region in terms of
mobile-money services.
 Back ground of MFs….
B) Ethiopian Experiences
• The First Mobile Financial service provider in Ethiopia was M-Birr which is owned by the
five Micro finance institution.
• Since its launch in 2015, M-Birr has built a network of more than 1.2 million users
nationwide who deposit money at over 7,000 M-Birr locations(Agents).
• Even though there were other competitors like CBE birr and hello cash, still Ethiopia is the
least performing nation in the development of mobile money services.
• According to the data of the world Bank (2018), only 0.03% of the total population of the
country uses mobile money services.
 Back ground of MFs….
 The reason behind low adoption of mobile money in Ethiopia is;
• Under developed telecom infrastructure;
• Network and connectivity problems;
• High illiteracy rate in the country
• Beneficiaries have no prior experience or knowledge about financial services
• Lack of mobile phones on the part beneficiaries in rural areas
• Agents’ liquidity management problems
• Beneficiaries located in the most rural parts of the country have poor infrastructure and
limited access to financial institutions.
Back ground of MFs….

• In Ethiopia there are over 45 million mobile phone subscribers. Out of which,
• 22.7 million were mobile internet subscribers,
• 15.7 million were smart phone owner
• However, growth of smart phone adoption, mobile money, mobile banking and internet
banking are in the lowest growth level compared to 113 million population
Back ground of MFs….
Mobile money providers in Ethiopia.

• M-Birr: – Launched in September 2015 Ireland-based MOSS ICT in partnership with the 5
largest MFIs in Ethiopia(AmharaCredit and Savings Institution, Dedebit Credit and Savings
S.C., Oromia Credit and Savings S.C., Omo Microfinance S.C., and Addis Credit and Savings
Institution)
• Hello-Cash: – is an agent-based wallet service offered by Netherlands-based BelCash in
partnership with 3 large banks; Lion International Bank, Wegagen Bank, Cooprative Bank of
Oromia and Somali Micro Finance Institution.
• CBE-Birr: –Bill based mobile wallet service offered by CBE started its operation in 2017.
• Amole: –The first Omni channel aggregated digital product started its operation on July 2018.
Back ground of MFs….
• Hibir-Agent:–Agent-based mobile wallet service offered by Hibret bank started its
operation on 2015
• Awash Mobile Wallet: – Mobil wallet service offered by Awash bank.
• Abay-Bedeje: – Is an agent-based mobile wallet service offered by Abay bank.
• E-BIRR: – Is a mobile wallet service offered by the Cooperative Bank of Oromia.
• YenePay: – Is a digital payment platform started operation in October 2015 by a privet
FinTech company.
• SAHAY: - Is a digital payment platform started operation in 2019 by a privet FinTech
company.
• ORO-Agent: This is an agent-based mobile wallet service offered OIB.
BoA’s Mobile Money service (Agency Banking)
 In February 2018, Bank of Abyssinia introduced mobile money payment solution which is
known as Abyssinia Enqupay
 The system has different features and mainly focused in the customers sides with a limited
functionalities in other products/services.
 Recently, the Bank assessed global trends and carried out competitors analysis and now
acquired a new mobile money solution with aggregation product model (public side, agent,
merchant, bulk and bill payment services.
 The new payment solution is under final functional and business testing process and shall be
on go-live very soon.
BoA’s Mobile Money…
 The Bank acquired a new mobile money payment solution which enable the Bank to create
mobile money eco-system. The payment solution involves the following products/services;
 Public side (users)
 Agent
 Merchant (both online and store based through QR code)
 Bulk services
 And bill payments
It contains aggregated payment services via the following service channels for both banked and
unbanked customers.
 USSD
 Web module and
 mobile application
Benefits of MM
• Instant Payments between Wallets: the money transfer between the payer LucyPay wallet and
the payee wallet happens within seconds, instead of within hours or business days.
• Convenient: mobile money accounts are always on the users’ hands everywhere and customers
can use anywhere there is a mobile phone signal. Customers can receive, store, spend and send
money all from the account on their mobile phone at different ends.
• Low cost: In terms of time, efforts and transaction costs compared to the conventional services,
BoA LucyPay services are low cost offerings.
• Secure - transactions are safe and secure from end to end and also follows all provisions of the
applicable laws of the country. Mobile wallets are secured with plenty of robust technologies, such
as point-to-point encryption, passwords, one-time password (OTP) via SMS and security questions.
• Easy and Fast Self-Registration: As mobile wallets are all about saving people's time and
efforts, self-registration is undeniably easy and fast to transact.
 Mobile Payment Ecosystem
 The mobile money ecosystem includes mobile money providers and all third party
organizations that can benefit from mobile money, either by using it as a payment mechanism
or by leveraging mobile money accounts.
 The mobile money ecosystem facilitates transactions from different sectors, such as retail,
utilities, health, education, agriculture, and transportation in addition to credit, insurance and
savings.
 Mobile money ecosystem involves the following main categories;
• Incoming transaction: it involves all incoming e-money to users wallet by means
of
cash in, remittances/transfer, salary/bulk payment, etc which in turn used for payment
purposes.
Mobile Payment Ecosystem
• Circulating values: it contains all electronic transaction payments for
merchants or billers in exchange of gods and services.
• Outgoing values: it involves all cash outs at agents or braches outlets.
 All circulating values in the eco-system remains in the pool account of the merchants
And billers and ultimately remains as an electronic money deposit of the bank which
can
Be used by the stakeholders in the later period in the eco-system.
 Outgoing values are cost to the bank which entails cash withdrawals at branches and
Agents outlets and ultimately reduces circulating value at merchants and billers.
 Outgoing values can be reduced by providing efficient mobile money payment solutions,
Creating better awareness's and availing capable customer support.
Mobile Payment Ecosystem…
I. User (Public Side) Services
A) Registration
• Mobile telephony offers tremendous promise to facilitate the flow of money among users at
much lower transaction costs, bringing the bank to those currently unbanked.
• To use the system, customers have to register using the following alternatively service
channels;
• USSD: users can register by dialing service’s short code “example *000#” and fill all the
required fields;
• Smart phone applications; customers can easily register using mobile applications
available on Google/app stores or can get the apps from agents or branches of the Bank.
• Web module: users can access and register for the service using web URL/link
dedicated
to the service.
User (Public Side) Services…
B) Main Customer Services

The following are main customer/public side services

• Transfer (P2P, P2B, P2G)
• Cash-in (coupon)
• Link account
• Load money
• Mobile airtime top-up
• Merchant payment
• Bill payment
• OTC
• Check balance
• Account management, and
• Others
 User (Public Side) Services…
c) Customers Account Levels (NBE D.No ONPS/01/2020)
There are three categories upon opening of an electronic money account.
a. Level 1 accounts shall be subject to a maximum account balance of Ethiopian Birr 5,000,
an aggregate daily transaction limit of Ethiopian Birr 1,000 and an aggregate monthly
transaction limit of Ethiopian Birr 10,000.
b. Level 2 accounts shall be subject to a maximum account balance of Ethiopian Birr
20,000, an aggregate daily transaction limit of Ethiopian Birr 5,000 and an aggregate
monthly transaction limit of Ethiopian Birr 40,000.
c. Level 3 accounts shall be subject to a maximum account balance of Ethiopian Birr
30,000, an aggregate daily transaction limit of Ethiopian Birr 8,000 and an aggregate
monthly transaction limit of Ethiopian Birr 60,000.
User (Public Side) Services…
Customer Accounts Levels (NBE D.No ONPS/01/2020)

• If a user has more than one account with a similar Level; the aggregate
balance of all accounts shall not exceed the respective category limit where
the account belongs.
• If a user has more than one electronic account with different Levels, the limit
of the higher Level shall apply
• Walk-in users shall be subject to a single maximum daily transaction limit of
Ethiopian Birr 500.
• An electronic account belonging to an agent and merchant shall have no amount
limit for transactions made in relation to users.
 User (Public Side) Services…
D) KYC Requirements
• Know Your Customer" means a set of due diligence measures undertaken by a financial
institution, including policies and procedures, to identify a user and a motivation behind his
financial activities;
a. for Level I accounts name, date of birth, residential address, telephone number, recent
photo of the user and the user shall be introduced by another person who already
maintains an account with the payment instrument issuer.
b. for Level 2 accounts name, date of birth, residential address, telephone number and
recent photo and identity card of the user and shall be captured in the system.
c. for Level 3 accounts name, date of birth, residential/business address. telephone
number a photo and identification card of the account holder shall be captured in the
system whichever is appropriate for individuals and entities.
 User (Public Side) Services…
Up on registration, new users shall be categorized under zero level. Customers service
levels (to level I, II and III) shall be upgraded by branches or the Bank’s agents
ascertaining fulfillments of the required KYC requirement on the system.
Branches and agents are required to confirm validate of the document presented by a user
for levels upgrade.
Level III accounts are permitted only to BoA staff and individuals engaged in
trading/business activities. While upgrading customers account in to level III, branches
and the Bank’s agents MUST validate trade license and the accompanying documents for
illegibility of the service.
A walk-in user or a user without an electronic account shall be subject to Level 2 Customer
Due Diligence requirements as mentioned in this sub-article.
II. Agent Banking Services
• Agency banking is a way providing limited scale banking and financial services through
engaged agents under a valid agency agreement.
• Agents are person engaged in a legal commercial/business activity and has been
contracted by the Bank of Abyssinia (BoA) to provide the services of the Bank on its
behalf in a manner specified in the Directives of National Bank of Ethiopia.
• The following are major services provided by agents of the Bank

E-wallet users registration

 Mobile Airtime top-up


Cash-in
 Bulk upload


Cash-out
 Merchant payment


Local Electronic money Transfer

 Balance check or enquire


Link account and load money

 Customer management

Agent Services…
A) Agent due diligence (ADD)

• BoA established efficient, clear, well documented and comprehensive agent due diligence police and procedure for
initial and ongoing assessment of agents in a manner that mitigate risks
• The agent due diligence policies and procedures clearly specify the roles and responsibilities of the different
functions of the Bank.
• BoA undertake customer due diligence and insure that its agents fully compile with the requirement of all relevant
laws on prevention and suppression of money laundering and financing of terrorism and also meet other eligibility
criteria.
• BoA conduct an initial agent due diligence for a new agents at least to insure illegibility and legality of the agent
as defined in its Agent Due Diligence procedure and in the Directives of the NBE.
• The Bank validate, capture and maintain all the required information and documents related to the agent stated
in the ADD.
• The Bank recruiting an agent, assess and scrutinizes the reliability of the information provided by the agent.
• The Bank check and verify whether or not a person intending to be an agent is prohibited from carrying on profit-
making business under an applicable law.
Agent Services…
B) Eligibility
• Only local business entities that are owned by Ethiopian citizens are eligible to be contracted
as an agent for the Bank. An entity intending to be appointed as an agent shall own permit
for a lawful commercial activity for at least six months immediately preceding the date of the
application to become an agent.
• The following entities shall be eligible for appointment as agents:
• Merchants who have already made in to contract with the Bank to accept payments with
cards
• Individual traders(sole proprietorship)
• Organizations incorporated in the form of partnership or share companies
• Private Limited Companies
• Cooperatives and Unions
• Trusts and
• Any other entity which the National Bank of Ethiopia may prescribe.
Agent Services…
C) Non-Eligible Entities

• Foreign person or entity that is fully or partially owned by foreign company.

• Religious entity which is faith based.
• Not for profit such as non-government organizations whose applicable law
prohibits from engaging in profit making business shall not be an agent of the
Bank
Agent Services…
D) Agents prohibited activities
• Branches ensure that an agent shall not;-
• Under take agency business service beyond its designated geographical area;
• Under take transactions in the absence of system or network connectivity;
• Deny issuance of receipt or advice to user;
• Under take transactions when issuance of receipt or advice is not possible;
• Charge or collect any fees from users directly;
• Open regular account, grant loans, carry out any appraisal functions for propose of opening an account or any
other facility except as may be permitted by any other written law to which the agent is subject;
• Under taking cheque deposit and encashment of cheque;
• Transact in foreign currency;
• Impose separate terms and conditions a part from those provided by the Bank;
• Perform against or beyond the agency contract; and,
• Under take other activities that are prohibited by national bank.
Agent Services…
E) Agents On-boarding

• Agent On-boarding is the process of integrating new agents into the Bank and its working culture. The
relationship between agency banking provider (Bank) and their agents is like a marriage.
• Agent on boarding begins with the identifications of focus areas/businesses for the operation of agency
banking.
• After identification of focus areas, branches start agent origination; it is the process of approaching and
orienting prospective agents for joint success.
• It is also the process of providing information on the intention of the on boarding and showing all the
benefits that the parties draw for the business.
• Moreover, branches/operators are also required to sufficient information on the product, its uniqueness
and other features differentiating it from competitors.
• After identifying a potential agent based on the stipulations of Agents Due Diligence procedure of the
Bank, branches are required to train them the bank’s agency banking operation process, the operating
system and Anti-Money Laundering requirements related to the Agency business and finally provide AML
and Certificates of Agency.
 Agent Services…
F) Requirements (Sole Business)

• Agent’s application letter and the name of the entity proposed to be agent;
• Copy valid business license, VAT Certificate and Tax Clearance Certificate or letter from an appropriate
government body explaining or permitting engagement in agent service (if there is any limitation);
• Availability of funds to cover the agent banking operations (float balance both hard and soft limit);
• Curriculum vitae detailing educational qualifications, business and work experience;
• Financial affairs for the last one years, audited or provisional;
• A certificate of good conduct from local police station;
• Physical location GPS coordinate (if any), postal address and telephone number of the entity and its working
hours;
• Renewed Kebele ID/Passport/Driving license and one passport size photograph of an agent;
• An agent must submit a written consent from the regulatory body (if required);
• The agency contract or agreement;
• Any other information the bank may require.
 Agent Services…
F) Requirements (Co-operative/Company/Plc Agents)
• Agent’s application letter and the name of the entity proposed to be agent;
• Articles and memorandum of associations. The memorandum and articles of associations should clearly indicate intent of the
company to provide agency banking services in its list of objectives and also clearly indicate responsibility/authority of the
manager to sign agency contract on behalf of the company with the Bank;
• valid business license, VAT Certificate and Tax Clearance Certificate or letter from an appropriate government body
explaining or permitting engagement in agent service (if there is any limitation); A brief description of commercial activity
that the agent has been carrying on prior to the date of application;
• Evidence of availability of funds to cover the agent banking operations including deposits and withdrawals by customers;
• Financial affairs for the last one years, audited or provisional;
• Management profile of individuals involved in managing the business;
• Address of the agent (Physical location, postal address and telephone number of the entity and its working hours; )
• Renewed Kebele ID/Passport/Driving license of the company manager;
• The agent must submit a written consent from the regulatory body (if required);
• Any other information the bank may require.
 Agent Services…
G) Agent registration process
The following information has to be captured by branches during the registration process
Name of the Agent; Company Type
Date:- issuing and expired date of the trade licence
Type of Business: License No., TIN no., Date of Establishment, and Number of Branches
Company’s regulatory body (if applicable)
Source of fund and initial Float Account Limit
 Address: Region/City administration, Zone / Sub city, Woreda, Town /Kebele, House Number,
Telephone (mobile) , Fax, PO BOX, E-mail, Web Site and Working hours;
Mobile no. to be assigned for Agent Banking
Share holders /if applicable/
Financial Statement:- Types of financial statement, Period of Financial statement, Total Asset,
Capital, Liability, Total income and net income
 Agent Services…
H) Agents Recruitment Focus Areas
 The following are sample focus areas of agents recruitment
Boutiques and shoe shops  Furniture shops
Regular trading shops (Kiosks)  Employment agencies
Computer shops  Agricultural retail and wholesale traders
Stationery and printing  Beauty salon
Supermarkets  Eye glass shop
Electronics shops  Baltena shops
Spare parts shops  Laundry shops
Mobile telephone sales and maintenance shops  Building material shops
Book stores  Ceramics sales and distribution shops
Water and soft drink distributors (shops)  Jewelry and article goods shops
Photography centers  Fast food traders and juice houses
Consumers retail shops  Oil and lubricant shops
Cosmetic shops  Internet café
Grain traders  Pharmacies
Mini-markets  Fuel stations
Cooperatives (agricultural and others)  Small and medium cooperative enterprises
Bakeries and pastries  Butchery
 Agent Services…
I) Operation
• Up on fulfillments of the KYC requirements, the agent will be trained and also the responsible
branch ensures fulfillment of the requirements and conclude agency contract.
• The branches also ensure fulfillments of all he required equipment for the service from the agent’s
side and register an agent in the E-Wallet system.
• Following the agents registration, the branch tests the system and provides full access to the
agent for transaction. Before operation, branches have to ensure the following aspects
• Availability of agent’s equipment for operation and readiness of the system;
• Convene training to the agent;
• Fulfill agency certificate and stickers;
• Ensure fulfillments of all receipts;
• Ensure safety and soundness of the agent’s office/premises for operation;
• Publication of the agent’s information on the Bank’s website; and,
• Finally assist performance of transactions
 Agent Services…
J) Monitoring and Follow up
Checklists for Agent Monitoring
• At the time of visiting the agent we should consider the following points.
• Availability of Float, Cash and log books
• Standards for Assistance, KYC and Record keeping
• Visibility of Thematic advertising, Pricing poster and Agent number
Talents for Agent Follow-up
• There are some tips hear;
• Meet and Greets. The best way to make anyone remember you, of course, is to make face-
to-face contact.
• Classes/Workshops.
• Postcards gifts.
• Hand-written Notes.
• Timely Submissions of required materials.
 Agent Services…
K) Termination of Agent contract
• Agency contract shall be terminated, if an agent:
• Has ceased main commercial activity;
• Is guilty of criminal offence involving fraud, dishonesty or other financial in property;
• Sustains a financial loss or damage to such a degree which, in the opinion of financial
institution, makes it impossible for the agent to gain its financial soundness within three
months from the date of loss or damage;
• Is being dissolved or wounded up through court or otherwise;
• Dies or becomes mentally incapacitated, in case of a natural person;
• Relocate or closes its premises without the prior written consents of the financial institution:
• Violet any provision of this directive which warrants termination of agency relationship, in the
opinion of the financial institution or the national bank.
 Agent Services…
L) Agent Termination Process
 If the agent contract terminated the following process has to be maintain
• Send or receive termination request
• Make account reconciliation for the required agent closely with Agent Banking Department
• Close the agent account
• Collect or remove all logos and promotional material from the agent premises up on the termination of agency
contract
• The branch insure that an agent doesn’t continue with agency business service when it is affected by any of
the above cases
• The branch notify Agent Banking Dep’t in writing every quarter termination of the contract: demonstrating
name of agent, location of agent, notice of termination to general public, reason and date of termination
• Up on termination, right and obligations of the Bank and agent shall be settled in accordance with transition
clause under agency contact
• The Bank removes the agent list from the bank portal and agent banking department portal
• After the above process the branch should give the agent termination letter
 Agent Services…
M) Relocation, Transfer and Closure of Agent Premises
• No agent shall relocate, transfer or close its agent banking premises without the 30 days prior written
notification of the Branch.
• Branches have to require the agent to affix on agents business premises the date of intended relocation or
closure.

N) Reporting
Branches shall submit to the Agent Banking Department at the end of every month information on agency
business operations including
• Number of agent, Serial number of agent, District of agent, Responsible branch, Specific location of agent,
Agent main business, Number of agent terminated, Number of new agent;
• Number of agents who relocated their premises, Type, value, volume and geographical distribution of
operations or transaction, Customer complaints; and,
• Remedial measures taken to address customer complaints, Details of training and awareness creation session
conducted, and Any other information required by Agent Banking Department
 Agent Services…
O) Reporting of Suspicious Transaction
• All agents of the Bank have an obligation to report any knowledge or suspicion of money laundering or terrorist
financing. The possible sign for money laundering or terrorist financing are:
• Frequent, High Value Cash Transactions;- Criminals often accumulate large amounts of low-denomination
notes (e.g. drug dealers). Such transactions could also be an indication of funds from illegal activities.
• Multiple Accounts;- A customer who transacts frequently using multiple accounts could be trying to avoid looking
suspicious therefore splitting the funds into various accounts.
• Fake/Forged Currency;- Customers who deposit fake/forged currency into their accounts then withdraw at a
different agency so as to get ‘clean’ money leading to agents incurring losses.
• Evading KYC Check;- Customers who repeatedly try to convince agents to transact without presenting their ID
documents could be doing so to disguise their identity due to the irregular activities they are involved in.
• Invalid ID Documentation;- Customers who provide fake/expired ID documents for registration purposes and
while transacting (deposits and withdrawals) should be reported.
• Customers Transacting at Maximum Daily Limit;- Customers cyclically/daily transacting to the maximum of
their daily transaction limit without having reasonable source of income can be suspected and should be reported.
 Agent Services…
P) Procedure for Reporting Suspicious Transactions
1. All Suspicions transactions must be reported as soon as possible to the nearby branch of the Bank
by completing the Suspicious Activity Reporting form;

2. Sufficient information should be disclosed which indicates the nature of and reason for the
suspicion;

3. Reporting agent shall not disclose the fact that a suspicion has been reported;

4. Contents of the suspicious Activity Report. All suspicious activity report must include the following;

• The name and contact details of the agent/agent’s staff making the report;

• Full details of the customer including all available KYC;

• Statements of the information which has given rise to the suspicion; and,

• The date and time of the report

5. Branches directly report to Risk and Compliance Management Department

 Agent Services…
Q) Benefits of Agent Banking Services

Benefits to the Bank Benefits to the Agent

Increased sales from additional foot-traffic (cross
Compliment the Branch network;
 selling);
 

Differentiation from other businesses the agent might
Increased customer base and market share;  normally operate;
 
 
Increase the Bank’s footprint: Increased coverage 
with low-cost solution in areas with potentially less Reputation from affiliation with well-known financial
number and volume of transactions ( more institution;
visibility);

Increased revenue from additional investment, and Additional revenue from commissions and incentives;
fee income; and and

Reduce the cost of banking: Requires smaller 

Acquisition of additional skills
investments
III. Merchant Service
• Merchant is a company/individual sole businesses registered and licensed according to the Commercial
Code and other applicable laws of Ethiopia and contracted with the Bank to use BoA’s mobile money
services for payment collections from the Bank’s registered users of the system.
• There are two types of Merchants;
 Online Merchant: - It is a merchant that sales its goods & service through online. These
merchants own e-commerce site.
 Offline Merchant: - is a merchant that sale its goods and service through QR code or P2B transfer.
These kinds of merchants are also called store based.
• Merchant Services Processing
 Online Booking or use of wallet (with system integration)
 QR Code (Unique or static)
 Wallet to wallet
• Merchants access the bank’s system in two ways: system integration and direct registration through BoA’s
branches.
III. Merchant Service….
A) Online booking
 Online booking activity is under taken in the merchant’s websites by integrating with the
Bank. This integration let the online merchant to take or collect the transaction fee using
the wallet.
 Customers login/open the merchant’s website, refer the items selected to the cart, move
to the payment getaway, select payment options and effect their payment to the
merchant.
 The system sends notification message on the payment for both parties and the
merchant ship the items to the premises of the customer.
 Before effecting the payment, the customer should have sufficient balance in his/her e-
wallet. E.g. Amazon and Alibaba.
III. Merchant Service….
B) QR code Payment
• QR code (abbreviated from Quick Response code) is the trademark for a type of matrix
barcode (or two-dimensional barcode) first designed in 1994 for the automotive industry in
Japan.
• A barcode is a machine-readable optical label that contains information about the item to
which it is attached.
• In wallet service provision, QR code as its name gives quick response. The merchant
generate the QR code for the respective cashier and let their customers to scan their
generated QR code so within few min the transaction done successfully.
C. Wallet to wallet (Proxy)
• It enables customers pay their transaction payments by transferring from customer wallet
to the merchant wallet using the three channels (USSD, App and Web).
III. Merchant Service….
D) Merchant service Features

• Merchant service features are:-

 QR Module
• Generating QR: generating new QR code for making transactions
• Managing QR: Manage all transaction via QR
 User Management :-Adding new user and list of users display
 Branch Management:-To add new branch & manage branches under the selected
Merchant
 Cashier Management: To add cashiers and Manage the Existing Cashier
III. Merchant Service….
E) Merchant Service Channels
• The Bank’s Merchant payment services are provided via App and Web options.
i. Merchant web Service
• The merchant web service is provided to those merchants registered by branches/Agent
Banking Department of the Bank. The web service is provided by URL which may be
interlinked by hypertext, and are accessible over the Internet. And the web address can
be accessed from the Bank’s website.
ii. Cashier App
• Merchant mobile application is a kind of any other Mobile banking which enables the
merchant to transact (collect payments) trough the mobile application.
• The casher app enables the casher to collect all payments using QR and Wallet to wallet
transfer and casher can view the transaction report.
III. Merchant Service….
F) Branches Responsibility
1. Select potential Merchant based on the Bank due diligent policies and procedures
2. Collect all the required documents from selected Merchant.
3. Follow up (visiting Merchant at list in a week)
4. Update File management of the registered Merchant
5. Give training for Merchant
6. Audit transactional aspects of the respective Merchant
7. Properly adjust Merchant file for NBE supervision
8. Regularly report Merchant performance to the Agent Banking Department as per the
formats prepared.
9. Raise awareness of Merchant service; and,
10. Persuade potential customers to be a Merchant by telling benefit merchant services.
 III. Merchant Service….
G) KYC Requirement and Documentation
• Know Your Customer or KYC Requirement is the process by which banks and financial institutions
verify the identities of their clients and assess any potential risks of forming a business relationship
with them.
• The goal of KYC is to prevent banks from being used, intentionally or not, for money laundering and
other illegal activities. The Following are some of the measures for KYC purpose for their merchants.
• Present a signed merchant application.
• Articles and memorandum of association (if any)
• Must be legally registered
• Trade license, registration certificate, VAT certificate, TIN certificate.(If required)
• Must open an account.
• Must use the BOA’s app or web MM services; and
• Conclude merchant agreement (sign the Bank’s merchant contract)
 III. Merchant Service….
G) Target Area for Merchant
• The following table depicts sample target businesses areas for merchant’s recruitment
Sample Merchant Recruitment Areas
 Hospitals  Grain traders and millers
 Clinics and pharmacies  Ethio-Telecom scratch card retailers
 Fuel stations  Event organizing companies
 Boutiques and shoe shops  Maintenance & replacement center (Garage)
 Computer shops  Ticket Office
 Stationary and printing shops  kiosk/shop 
 Supermarkets  Grain, fruit and vegetable suppliers or traders
 Consumers retail shops  Beauty salon
 Textile wholesalers, retailers and tailors  Eye glass shop
 Bakeries and pastries  Transport companies
 Tour service  Airlines
 Hotels, restaurants and cafeterias  DSTV
 Electronics shops  Agricultural retail and wholesale traders
 Spare parts shops  Coffee washing stations
 Mobile telephone sales and maintenance shops  Coffee producers and retailers
 Book stores  Import trade companies
 Hotels  Pastry, groceries, Pubs
 III. Merchant Service….
H) Merchant on-boarding
• Merchant on boarding is the process of acclimating and welcoming new merchants into an
organization and providing them with the tools, resources, and knowledge.
• As not all merchants are the same, the level of risk and amount of due diligence checks
necessary change accordingly. While there are differences in the level of due diligence, there are
standards that must be met.
• There are legal compliance factors, such as AML and KYC. There’s six-step process to
successfully onboard a merchant:
1. Identity or verification/KYC
2. Merchant history check
3. Business and operational model analysis
4. Web content analysis
5. Information security compliance
6. On boarding and Underwriting Process
 III. Merchant Service….
I) Merchant’s Training
• Training refers to the teaching and learning activities carried out by branches and Agent Banking Department for
the purpose of helping its merchants to acquire and apply the knowledge, skills, abilities, and attitudes to the
service.
• Training can take place either at the Merchant location on a one-on-one basis or in a central location bringing
larger numbers of Merchant together. Training a Merchant in his or her shop (outlets) ensures focus as well as
practical application of the training. Some of the topics to include in training curriculum are as follows:
• Merchant responsibilities
• Information on how to conduct transactions
• How to generate QR code
• Wallet to wallet transfer
• Refund
• Usually, there is a period of intensive initial training. There may be some subsequent training that usually is in
direct response to changes in product features. As with other elements of Merchant management, the content,
length, and delivery of training depend on the local context.
 III. Merchant Service….
J) System integration Test and Implementation
i. System Integration Test
• System integration testing is a type of software testing carried out in an integrated hardware and software
environment to verify the behavior of the complete system functionality of merchant apps.
• It is a testing conducted on a complete, integrated system to evaluate the system's compliance with its specified
requirement.
• In this case, the Bank’s wallet system and the merchant’s system will be integrated using API. After completion of
the integration process, then, testing (real time transaction) undertaken by branches closely working with the
Agent Banking Department.
ii. Generate QR code
• A QR code is a machine-readable optical label that contains information about the item to which it is attached for
the merchant registered in the Banks e-wallet system.
• Admin user merchant can create QR by enter alias name and select the branch for the generated QR. This QR
code will be assigned to a specific cashier of the merchant who collects payment from users in return for goods
and services to be sold.
 III. Merchant Service….
III. Merchants without System Integration

• These are small merchants including kiosks, pharmacies, small hotels,

restaurants, etc simply registered by branches on the platform.
• Branches register them and help the generate the QR code for payment
collection purposes. Users can transact by scanning the payment QR
code.
• In addition, Customers can also pay directly from their wallets (P2B)
directly to the merchants registered account via Mobil app or the USSD.
 III. Merchant Service….
K) Documentation and Merchant’s Registration on the System
• The following information of merchants shall be captured by branches or ABD and registered on the
system.

 Name of Merchant, Type of Business, Trade name/Company Name, Form of Business;

 Work experience , Manager’s Name, Educational Qualification, Address and Merchant’s Business;

 Region, City/Town, Sub City, Woreda/Kebele, House No, Telephone, Fax No, Email, Special name of the
working area, Nationality, Name of BoA’s Nearby Branch, Merchant’s CBS Acct. No’

 Form of Business, Trade License No., Date Issued, Issuing authority, Place Issued, TIN no., Number of
branches, other businesses, Number of Branches, Company’s regulatory body (if applicable)

 Financial Statement; (Type of Financial Statement: Audited, Provisional and CCR)

 Period of Financial Statement: Recent Year, Last Year and Previous Year

 Total Assets (Birr) , Capital (Birr), Liability, Total Income (Sales) and Net Income.
 III. Merchant Service….
L) Monitoring and Follow up
• Merchant acquirers or payment service providers may face several controllable and uncontrollable
predicaments that affect their day to day businesses. Due to this, the may not prefer to use the
system or;
• Merchants fundamentally changes the nature of their business, or the volume of transactions or
transaction amounts dramatically may change.
• In this case, a change in the risk criteria requires reassessing the merchant; as they can already be
doing damage, the quicker, and the better.
• Due to various factors, volume of transactions flowing on the system decreases. The problem shall be
readjusted by employing regular monitoring and follow-up by branches.
• Branches are responsible to monitor volume of transaction of each merchant registered under their
domain on weekly basis and take all corrective measures using the formats distributed by ABD.
• Through regular monitoring and follow-ups, branches have to identify problems merchants faced and
provide all the solutions in closely discussing with districts and ABD.
 III. Merchant Service….
M) Merchant Termination
 Merchant contract shall be terminated, if a merchant:
• Has ceased main commercial activity;
• Is guilty of criminal offence involving fraud, dishonesty or other financial in property;
• Sustains a financial loss or damage to such a degree which, in the opinion of financial
institution, makes it impossible for merchant to gain its financial soundness within three
months from the date of loss or damage;
• Is being dissolved or wounded up through court or otherwise;
• Dies or becomes mentally incapacitated, in case of a natural person;
• Relocate or closes its premises without the prior written consents of the financial institution:
• Violet any provision of the government policy and procedure
 III. Merchant Service….
N) Reporting
 Branches have to immediately report to the ABD suspected or confirmed cases of fraud, major security,
breaches, any material service interruption or other significant issues it knows or reasonably expect to
know:
 Name and serial number of the merchant
 District (BoA) of merchant and Responsible branch
 Specific location of the merchant and Merchant’s main business
 Number of merchant terminated and Number of new merchant
 Number of merchant who relocated their premises
 Type, value, volume and geographical distribution of operations or transaction
 Customer complaints
 Remedial measures taken to address customer complaints
 Details of training and awareness creation session conducted; and
 Any other information required by the national bank
 IV. Bill Payment Services
• Bill payment is a facility provided to the customer to make their Bill payments (all utility bills;
water, electricity, power) and all fixed tenure payments including school fees online through
digital wallet.
• The Bank provided new and separate cloud aggregated bill payment system to its billers. Billers
simply register and upload their bills to the system that can be accessed by users for payments
through their e-wallet system
• E-bill payment usually tied to a checking account from which funds are withdrawn electronically
for payment of one-time or recurring bills.
• Bank of Abyssinian Bill payment service are undertaken by using Digital wallet. In the bill
payment, the service is provided by integrating with billers service provider. Which let the
customer to pay own utility and other bill trough the digital wallet.
• As its known the digital wallet have user and Agent services for the customer of the bank as
well for the unbanked society, anyone who needs to pay bill service can pay using all the
channels (app, web and USSD) and also through Boa branches and its gents.
 IV. Bill Payment Services…
A) E-bill Level Classification
• The end to end E-Bill system has three main parts; supper admin, user admin and e-biller
parts for separate users.
• E-Bill super admin: - it contains whole features of e-bill used which is used to create
e-bill user admin; E-bill super admin is the financial service provider (BOA Head Office).
• E-Bill user admin: - it is a system used to create different billers it also called bill
checker. E-bill user admin is utility and other service provider. For example a school
having more than one branch can register its central office as a user admin at BOA
Head Office. This user admin creates other branches centrally as separate billers where
each biller can simply upload its bill accordingly on the system.
• Billers: - individual entities or main billers outlets who upload their separate bills in
to
the system. Example; school branches. In this case, the end users (customers) can
settle or pay their billers directly from these specific billers.
 IV. Bill Payment Services…
B) Biller’s on boarding
• Biller On-boarding is the process of acclimating and welcoming new biller into the Bank and providing them with
the tools, resources and knowledge.
• Billers’ on boarding begins with the identification of billers focus areas or the areas the Bank has to concentrate to
work on more and origination of client biller.
• The originating branch or work unit provides orientations and sufficient information regarding bill system of the
bank.

C) KYC Requirement
i. For sole business
• Renewed Trade License, Certificate of VAT registration, Trade name and Boa CBs Account and others

ii. For Corporate Customers (with system integration)

• Articles of incorporation, signed minutes of board of directors or authority of the Manager/CEO to conclude
biller’s contract
• Trade License, Trade Name, VAT registration Certificate and others
 IV. Bill Payment Services…
D) Training
• Some of the topics to include in training curriculum for billers are;
• Biller responsibilities, Biller Management and information on how to conduct transactions.
E) Operation
• After fulfilling the entire KYC requirement, the recruited biller is going to be trained, contract shall be
concluded, system integration will be undertaken (API exchanges) and final testing and transaction flow will be
aligned.
• All responsible branches together with Agent Banking Department follow proper testing and functioning of the
credentials sent to the merchants and smooth flow of the day to day transactions of the registered merchant.
F) Billers without System Integration

• These are small billers with fixed payment tenures which can be simply registered by branches on the platform.

• Customers can pay directly from their wallets (P2B) directly to the billers registered account via Mobil app or
the USSD.
 IV. Bill Payment Services…
G) Target Area for Bill Payment

• The following focus area is used to depict recruitment for bill payment:-
• Ethio-Telecom Bills
• Water and sewerage bills
• Electricity bills
• School fees
• Ethiopian Television annual registration and subscription fees
• DStv, etc.
 IV. Bill Payment Services…
G) Monitoring and Follow-up
• It involves checking performance of the registered biller in the e-bill system of the Bank.
• The monitoring part also involves adherence of the biller to the bank’s rules and regulations
and also to the rules of the National Bank of Ethiopia.
• Moreover, due to various factors, volume of transactions flowing on the system decreases.
The problem shall be managed by employing regular monitoring and follow-up by branches.
• Branches are responsible to monitor volume of transaction of each biller registered under
their domain on weekly basis and take all corrective measures using the formats distributed
by ABD.
• Through regular monitoring and follow-ups, branches have to identify problems billers
faced and provide all the solutions in closely discussing with districts and ABD.
 IV. Bill Payment Services…
H) Biller Termination
 Biller contract shall be terminated, if a Biller:

• Has ceased main commercial activity;

• Is guilty of criminal offence involving fraud, dishonesty or other financial in property;

• Sustains a financial loss or damage to such a degree which, in the opinion of financial

institution, makes it impossible for biller to gain its financial soundness within three months

from the date of loss or damage;

• Is being dissolved or wounded up through court or otherwise;

• Dies or becomes mentally incapacitated, in case of a natural person;

• Relocate or closes its premises without the prior written consents of the bank,

• Violet any provision of the government policy and procedure; and,

• Officially requested for termination of the contract.

 IV. Bill Payment Services…
I) Reporting
 Branches have to immediately report to the ABD suspected or confirmed cases of fraud, major security, breaches, any material
service interruption or other significant issues it knows or reasonably expect to know:
 Name and serial number of the biller

 District (BoA) of biller and Responsible branch

 Specific location of the biller and its main business
 Number of biller terminated and Number of new merchant

 Number of biller who relocated their premises

 Type, value, volume and geographical distribution of operations or transaction

 Customer complaints
 Remedial measures taken to address customer complaints
 Details of training and awareness creation session conducted; and
 Any other information required by the national bank
 V. Bulk Payment
• Bulk Payment is a payment to multiple beneficiaries from single bank account. In other words Bulk
payments are one-to-many payments that go from one paying agency to many beneficiaries at
once.
• The term “bulk payments” includes a variety of different kinds of payments. Some common types
of payments like:-
• Salary payments and expense reimbursements
• Payments of Pension contributions
• Unconditional cash transfers and crisis payments (emergency payment-humanitarian aid
distributions)
• Conditional cash transfers (Donation)
• The bulk payments ecosystem is highly fragmented. In developed payments markets, bulk
payments are almost entirely electronic. Governments and businesses have access to efficient
electronic payment systems through which they can send transfers.
 V. Bulk Payment
A) Bulk Recruitment Criteria’s

• Business License

• Written consent from the regulatory body (if required)

• Physical Address & contact detail

• Commercial registration Certificate

• TIN & VAT certificate (if required)

• Memorandum & Article of Association (for business organizations)

• One year audited financial statement (if required)

• Account number
 V. Bulk Payment
B) Areas for bulk registration

• Private Businesses paying employee salary.

• Government Organization for salary payment.
• NGOs and humanitarian organization for aid distribution.
• Organizations using bulk air time top-up for their employees
• Note: process of bulk payment is similar to billers and branches have to follow the
requirements stated in the bill payments excluding some exceptions for NGO’s and
government organizations which shall be communicated via the Bank’s guidelines.
 V. Bulk Payment
C) Benefits of Bulk Services
• The following are some of the benefits of mobile money bulk payment/upload
functions.
• Saves time
• Quick payment
• Reduces multiple tasks and efforts
• Reduce risk
• Higher customer receptivity
• Better targeting
• Reliable & Cost-Effective
• Easy to handle
 Customer Contact and Orientation
 Branches and districts have to identify potential areas for their customer registration. Prepare a
register book and list out nearby potential NGOs, government and private organization for the
service.
 Following the listings, the assigned staff has to make all the necessary preparations and contact the
organizations as per the list for orientation and presentation about the product.
 The following are some of the tips that are necessary to follow in managing e-wallet and E-bill
business;
• Listens and responds to the customer needs within guidelines.
• Clarify customers’ needs or expectations, when doubt exists.
• Obtains an understanding of the specific customer’s needs and requirements.
• Comply with agreements entered into with customers or gives early notice of any deviations.
• Provides a timely response to customer’s complaints, feedback and comments.
• Actively inform customers’ intentions
Customer Support
• Customer support is a service provided to help customers resolve any technical problems that they
may have with a service.
• When people have problems or want to ask a question about a service, they have a right to contact
the Bank’s nearby branch or can use Toll-free Number (8397).
• The following are support structure for the mobile money services of the Bank
• Customer use and dial short code
• Agents and nearby branches of the Bank
• Call center/agent banking department or digital operations department
• Issues beyond the departments will be escalated to the core team
• Those issues which are beyond the core team will be escalated to the vendor for the earliest
solutions.
• Other issues related with compliance matters and overall operation of the system demanding
management’s intervention will be escalated accordingly
Thank You