Chapa: Revolutionizing Digital Payment in Ethiopia from 2022
Addis Ababa, Ethiopia ( 17 August 2022)
Chapa Financial Technologies S.C is an Ethiopian financial service and data engineering startup that was established in the capital of Ethiopia, Addis Ababa.
Literally meaning “money” in the Ethiopian youth slang, Chapa was founded in 2020 to empower small businesses and large merchants by smoothening the process of financial transactions. The strongest drive behind this company, as per its official website, is finding solutions to inconvenient payment methods that plague the increase in global trade, especially in developing countries.
Ethiopia’s digital economy has long been constrained by a poor financial institution
interoperability, cash-based online transactions, a dearth of functional digital payment gateways, and a small selection of fintech products.
interoperability, cash-based online transactions, a dearth of functional digital payment gateways, and a small selection of fintech products.
In 2020, when the National Bank of Ethiopia opened the fintech field for digital companies, Chapa was created with the goal of filling these gaps. The business acquired its Payment Gateway license from the National Bank of Ethiopia (NBE) in May 2022 and has already begun enrolling merchants. It is not without competition, however, as it is the third payment gateway company to receive a license following ArifPay and SunPay.
Before introducing its payment gateway service this month, Chap had carried out a few notable projects that had far-reaching impacts. The first of this initiative was MyGerd.com launched last year, which helped in raising USD 300 thousand for the Great Ethiopian Renaissance Dam (GERD) by partnering with Ethiopian Electric Power (EEP), Flutterwave, and Zemen Bank.
The second more impressive feat accomplished in November 2021 was when Chapa developed Eyezon, raising over USD 6 million for internally displaced Ethiopians and conflict-damaged health facilities, partnering with the Ethiopian Diaspora Agency (EDA) and the Commercial Bank of Ethiopia (CBE).
In a recently published report by Pragma Investment Advisory, Eyezon was one of the significant reasons remittances contributed 23% to forex inflow in Ethiopia in 2021-22. In addition, just two months ago, Chapa formed a partnership with Mila-Quebec Artificial Intelligence Institute, the world’s largest deep learning institute, enabling it to further research within the AI and machine learning world and allowing financial inclusion for SMEs and businesses.
Chapa Partnership with AI Institutions
Leaning on these successful ventures to kickstart further endeavors, Chapa officially launched its long-awaited payment gateway service on August 17, 2022, allowing its customers to process payments from both local and international options. With the introduction of this program, Chapa opened doors for Ethiopian businesses to accept payments from 4.5 billion people worldwide.
Fintech currently offers 10 local payment options and 8 international ones. The former constitutes Debit Card/ATM cards of Bank of Abyssinia, Awash International Bank, Addis International Bank, Hibert Bank, Cooperative Bank of Oromia, Berhan Bank, and NiB International Bank, while the latter includes JCB, Visa, PayPal, Discover, UnionPay MasterCard, Diners Club, and American Express.
Three other mobile payment systems, Telebirr, CBE Birr, and Awash Birr, have also been
integrated. In addition to providing payment solutions, Chapa also gives its clients metrics, data, and analytics to assist them in understanding their business operations and making data-driven decisions.
Businesses must first pass KYC checks, supply information about their operations such as TINs, business licenses, addresses, and contact details, and then be accepted before becoming Chapa customers. Merchants will be charged 3.5% for domestic transactions and 1% for international transactions, with discounts offered based on transaction volume. Payment is automatically placed into the merchant’s account within 24 hours.
integrated. In addition to providing payment solutions, Chapa also gives its clients metrics, data, and analytics to assist them in understanding their business operations and making data-driven decisions.
Businesses must first pass KYC checks, supply information about their operations such as TINs, business licenses, addresses, and contact details, and then be accepted before becoming Chapa customers. Merchants will be charged 3.5% for domestic transactions and 1% for international transactions, with discounts offered based on transaction volume. Payment is automatically placed into the merchant’s account within 24 hours.
According to reports, integrating this payment network is as simple as adding six lines of code to the websites or apps of merchant companies. Even so, Chap goes one step further by training programmers who can help companies with the integration process.
By 2025, Chapa hopes to empower and link 100,000 entrepreneurs and enterprises to the global economy. The company is particularly interested in the African market and is working to broaden its presence in various parts of the continent.