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May 27, 2014updated 04 Apr 2017 4:07pm

Visa lobbying Ethiopia to back electronic payments

Visa, an American electronic payments giant, is lobbying Ethiopian government to encourage electronic payments practice after the officials permitted a trial program of international debit cards.

By Verdict Staff

Visa, an American electronic payments giant, is lobbying Ethiopian government to encourage electronic payments practice after the officials permitted a trial program of international debit cards.

Under the Visa debit card pilot program, the government officials would be using the cards with spending limit of the amount pre-loaded on the card.

The financial firm has stated that the government has refrained foreign banks from operating in the country to protect local financial institutes while domestic card companies have no global experience, reported Reuters.

Visa manager for southern and east Africa Jabu Basopo told the news agency that the company is intending to persuade the government with the benefits of electronic payments and affirmed that officials are willing to try new things.

"They have agreed to a pilot for international cards. It is a very controlled environment," added Basopo.

The lack of debit cards practice in the country is reported to have hit retail industry, with transactions in the country predominantly dependent on cash.

"If you look at the main efficiencies brought by electronic payments … more money stays in the banks and the banks are able to lend that money back to retailers to do more business," explained Basopo.

The International Monetary Fund has warned Ethiopia to reduce public spending on roads, railways and power and increase private sector’s access to credit.

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