Evolution of Bank Cards
The development of card banking has been one of the major advancements in the banking sector. Card banking, or the use of card payments and transactions has played an essential role in increasing the banking sector’s accessibility and efficiency.
Modern Banking was first introduced in Ethiopia in the early twentieth century, although progress has been slower than in other parts of the continent. Over the last two decades, the sector has seen increased digital adoption and liberalization, with the introduction of bank cards in 2009.
Even though banks have issued millions of cards, the use of bank cards for payment still needs to improve. There are more than 35 million debit cards in circulation, but the vast majority are used to withdraw cash from ATMs. Because of the small number of POS terminals and insufficient customer support services supplied by the providers, the experience of using bank cards to pay at POS terminals tends to be unsatisfactory.
Despite these obstacles, there remains room for growth in the use of bank cards in Ethiopia. The value of POS transactions in Ethiopia in 2021/22 is close to 62.1 billion ETB which is an increase of 11.76 % as compared to the previous year (According to NBE). The country’s population is mostly young and growing, and it is increasingly adopting digital technologies. We are going to see more bank card payments in Ethiopia as the number of POS terminals and the quality of customer support services increase.
Card payments have numerous advantages for both individuals and the economy. It lowers currency printing, handling, and mobilization, resulting in cost savings and increased convenience. Because it is more secure than cash, it improves business productivity and consumer satisfaction.
Card payments are far safer than cash since they are secured with encryption and monitored by fraud detection systems. Card payment is a more efficient, convenient, and secure payment method for products and services.
In our Arif Insight, we explored the journey of bank cards, a technology that has only been around for less than half a century.