One in 10 Digital Payments Fails in Ethiopia, NBE Official Warns

Ethiopia’s rapid shift toward digital finance is exposing significant weaknesses in payment infrastructure, with roughly one in every ten digital payment transactions failing to complete successfully, according to a senior National Bank of Ethiopia (NBE) official.

Speaking at the Huawei Finance Summit 2026 in Addis Ababa, Naoll Addisu (PhD), Senior Technology Advisor to the Governor of the National Bank of Ethiopia, said the country’s digital financial ecosystem has expanded at an unprecedented pace but continues to struggle with service reliability, consumer protection, and infrastructure readiness.

Naoll estimated that approximately 8% of digital payment transactions fail, leaving customers caught between banks, payment switches, and other financial service providers as they seek to recover missing funds.

“When transactions fail, customers are often passed from one institution to another without a clear resolution,” he said, noting that in some cases it can take months before affected funds are returned.

The remarks come as Ethiopia continues one of Africa’s fastest digital financial transformations. According to the central bank, the country’s financial system processed approximately 24 billion digital transactions during the past nine months, while financial inclusion has reached an estimated 64%.

Despite this rapid growth, Naoll questioned whether headline figures accurately reflect meaningful financial inclusion.

Ethiopia currently has around 64 million financial accounts, with mobile money pushing the total number of registered accounts close to 128 million. However, he argued that account ownership alone should not be viewed as a measure of financial inclusion.

“Financial inclusion does not mean account opening. Financial inclusion means affordable and accessible,” he said.

He pointed out that nearly 70% of rural Ethiopia still relies on second-generation (2G) mobile networks, limiting access to advanced digital financial services. Credit penetration also remains relatively low despite strong growth in deposit accounts.

To address consumer concerns, Naoll said the National Bank has established a dedicated consumer protection directorate and introduced a public dispute resolution portal aimed at improving complaint handling and accelerating the resolution of failed transactions.

The central bank is also working to strengthen payment settlement mechanisms and increase accountability among financial institutions participating in Ethiopia’s expanding digital payments ecosystem.

Naoll warned that fragmentation persists, noting that multiple QR codes at merchant points highlight a lack of interoperability that complicates transactions for users.

He advocated for integrated platforms, programmable infrastructure, and smart contracts to enhance government subsidy and welfare delivery.

The National Bank is enacting reforms such as adopting the ISO 20022 standard, creating a cybersecurity oversight directorate, and developing interest-free instruments to boost inclusion.

Naoll also emphasized the need for domestic digital infrastructure to reduce Africa’s reliance on foreign cloud services and secure financial sovereignty.

At the Huawei Finance Summit, the tech firm presented AI solutions for banking, urging institutions to modernize through automation and personalized services.

Ethiopia’s primary challenge remains aligning rapid digital growth with stable infrastructure, robust consumer protection, and resilient payment systems.

Source: EBR