Card Banking in Ethiopia - Adoption, Challenges & Opportunities

This key report, produced by Shega as part of the AKOFADA project, explores the current state, challenges, and opportunities of card-based digital banking in Ethiopia. Focusing on ATMs, POS systems, and various types of payment cards, the report offers critical insights for financial institutions, technology providers, policymakers, and development partners working to advance digital financial inclusion.

The study reveals rapid growth in digital banking infrastructure, with ATM terminals increasing by over 60% in four years and debit card issuance surpassing 45 million. However, this expansion is concentrated in urban areas, leaving rural populations with limited access. Merchant POS adoption is similarly uneven, with the vast majority of terminals located in Addis Ababa. Despite improvements in interoperability and the introduction of innovative products like prepaid and biometric-enabled cards, actual usage patterns still reflect a strong reliance on cash withdrawals and limited engagement with full card functionalities.

The report highlights structural and behavioral barriers, including inadequate infrastructure, low digital literacy, and limited awareness of card features. It also presents targeted recommendations to bridge these gaps, such as rethinking ATM deployment strategies, supporting SMEs with affordable POS access, and promoting broader use cases for cards beyond cash withdrawals.

Overall, the report positions card banking as a vital component of Ethiopia’s journey toward a more inclusive digital financial system, while underscoring the need for coordinated efforts to ensure that growth translates into equitable access and meaningful usage.