Licensing and Authorization of Payment System Operators Directive No. ONPS/02/2020 (Ethiopia)

The Licensing and Authorization of Payment System Operators Directive No. ONPS/02/2020, issued by the National Bank of Ethiopia (NBE) in August 2020, established a licensing regime for payment system operators (PSO) as part of Ethiopia's digital-finance reforms. Where the contemporaneous Payment Instrument Issuers Directive (ONPS/01/2020) addressed the issuance of electronic/mobile money, this Directive governs the infrastructure operators that switch, route, process and enable electronic payments. Scope and applicability: the Directive applies to entities seeking NBE authorisation to operate payment systems. It defines categories of payment system operator, national switch operator, switch operator, automated teller machine (ATM) operator, point-of-sale (POS) device operator, and payment gateway operator, each with corresponding conditions. On foreign participation, the Directive generally restricts payment-system-operating business to Ethiopian nationals and foreign nationals of Ethiopian origin, with ownership vested accordingly; foreign technology providers may supply platforms/services where operators outsource technology, and the Directive notably opens space for foreign-owned companies in the payment gateway category. Core obligations: applicants must meet minimum capital calibrated to the operator category, satisfy fit-and-proper and governance requirements, and demonstrate technical, operational, security and risk-management capacity, interoperability where required, business continuity, and AML/CFT compliance. Operators must safeguard the integrity, reliability and security of the payment infrastructure they run and report to the NBE. Supervision and enforcement: the NBE licenses and supervises PSOs through reporting, inspection and audit, may impose conditions and corrective measures, and may suspend or revoke authorisation for breach. Operating a payment system without authorisation is an offence under the National Payment System Proclamation No. 718/2011, under which this Directive is made. Together with ONPS/01/2020, it forms the core of the NBE's licensing architecture for Ethiopia's liberalising digital-payments market.

1. 1Creates the NBE 'payment system operator' (PSO) licence for payment infrastructure providers
2. 2Categories: national switch operator, switch operator, ATM operator, POS device operator, payment gateway operator
3. 3Payment-system-operating business generally restricted to Ethiopian nationals and persons of Ethiopian origin; payment gateway category opened to foreign-owned companies
4. 4Foreign technology providers permitted via outsourcing arrangements
5. 5Minimum capital calibrated by operator category; fit-and-proper, governance, technical, security, interoperability and AML/CFT requirements
6. 6NBE licenses, supervises, inspects and may suspend/revoke authorisation; unauthorised operation is an offence