Interoperable, Yet Uneven

Originally published on Shega Media | February 20, 2026

In recent years, progress in Ethiopia’s digital payments ecosystem has mostly been measured by visible expansion. More point-of-sale machines at merchant counters, more QR stickers across storefronts, and more acceptance points in urban centers. Hardware has become the most immediate symbol of growth for financial institutions.

Interoperability, too, has been celebrated as proof of maturity. Once banks, wallets, and merchants could technically transact across institutions, the assumption was that fragmentation would fade and trust would follow. Both understandings misread where the system now stands.

In Ethiopia’s major cities, access is no longer the primary constraint. The challenge has shifted to behavior and institutional factors. The focus now is on managing and sustaining infrastructure, not simply deploying platforms. Across Addis Ababa and other urban centers, small shops commonly display multiple QR codes and several POS devices from different issuers. Competitive energy is concentrated on the same merchant. Meanwhile, in peri-urban, semi-rural, and rural areas, digital acceptance remains uneven, and meaningful access to broader financial services is still limited. This imbalance is becoming increasingly visible, with saturation in major urban markets and shallow penetration elsewhere.

This asymmetry requires serious attention. When institutions compete for the same urban acquiring relationships while large parts of the country remain underserved, the challenge extends beyond scale. It concerns the allocation of capital, the direction of operational focus, and the distribution of strategic attention.

Merchant acquiring goes beyond placing devices in the market. It requires ensuring that payments function reliably across customers, institutions, and failure scenarios. Interoperability alone does not guarantee reliability.

Ethiopia’s interoperable digital payments system has reached significant scale. In the most recent financial year, interoperable mobile banking transactions surpassed 128 million, with a total value of more than 577 billion Birr. Interoperable ATM transactions contributed an additional 119 million transactions worth 156 billion Birr.

Mobile wallets and mobile banking now generate billions of transactions each year. By comparison, POS transactions represent only a small share of total activity, despite the expansion of terminals. These numbers matter because they signal dependence. Firms, households, and institutions now assume digital payments will work. That assumption changes the economics of failure.

Yet the behavior suggests caution. Even in interoperable environments, customers maintain multiple wallets and bank accounts. Merchants have learned that settlement timing can vary, reversals may not be immediate, and accountability can blur when transactions fail. Because of this, they keep parallel acceptance options as insurance.

Another dynamic is also shaping the current reality. Competitive strength in acquiring merchants is not driven by device deployment, but rather relationships. For banks, acquiring strengthens merchant relationships and helps secure stable deposits. Settlement accounts sit with the acquiring institution. Daily transaction flows accumulate as balances. In a system where deposit mobilization remains strategic, acquiring provides a balance-sheet infrastructure. Merchants bring more than transaction fees. They bring liquidity stability, behavioral data, and long-term retention. Managed properly, acquiring becomes a structural asset.

A data-driven financial environment extends this logic further. Transaction velocity, inventory turnover, customer frequency, and seasonality increasingly inform working capital, inventory credit, and checkout financing. Acquiring generates the behavioral signals modern finance depends on. But none of this holds if the system does not behave like infrastructure. Interoperability enables transactions across institutions. It does not guarantee predictable settlement, disciplined dispute resolution, or clear ownership of failure. Users learn this from lived experience.

When reversals stretch into weeks or settlement timing varies, behavior adapts. Users diversify. Merchants increase their acceptance methods. Interoperable systems expose such operational differences. Failure in one institution can propagate across many. Connectivity becomes a transmission channel for uncertainty.

𝙄𝙣𝙛𝙧𝙖𝙨𝙩𝙧𝙪𝙘𝙩𝙪𝙧𝙚 𝙨𝙪𝙘𝙘𝙚𝙚𝙙𝙨 𝙗𝙮 𝙗𝙚𝙞𝙣𝙜 𝙥𝙧𝙚𝙙𝙞𝙘𝙩𝙖𝙗𝙡𝙚, 𝙣𝙚𝙪𝙩𝙧𝙖𝙡, 𝙖𝙣𝙙 𝙙𝙚𝙥𝙚𝙣𝙙𝙖𝙗𝙡𝙚. Once digital payments become central to economic life, settlement discipline, dispute timelines, and institutional clarity matter more than expansion metrics.

Deploying more devices does not solve institutional inconsistency. In patchy systems, it can intensify it. Each terminal adds reconciliation paths and failure boundaries. When something breaks, responsibility diffuses. Experienced merchants understand this instinctively. They prefer fewer reliable acceptance methods overcrowded counters of fragile ones.

The next phase of Ethiopia’s payments ecosystem will not be won by whoever installs the most terminals or connects the fastest. It will be won by institutions that treat reliability as a strategic asset and that align expansion with inclusion rather than concentration. While interoperability opens the door, reliability determines whether the system earns the right to stay open. And inclusion will determine whether the system serves the whole economy, not just the visible parts of it