FaydaVerse, a state-owned enterprise led by Yodahe Zemichael, has started charging commercial banks for digital identity checks. The company, which manages the national digital identity system, claims the fees are necessary to sustain its operations. Banks are required to pay each time they retrieve information from Fayda for know-your-customer checks or biometric authentication. This move has sparked strong opposition from the banking sector.
The Bankers Association has expressed concerns that the fees are high, unconsulted, and amount to double charging. According to the association, banks had previously received these services for free. The new charges have been imposed as FaydaVerse transitions into a state enterprise expected to generate part of its revenue through these fees. The association is pushing back against the charges, citing the potential impact on the banking sector.
FaydaVerse's shift to a commercial model is part of a broader effort to transform state-owned enterprises into modern and competitive entities. The company believes that the fees will enable it to sustain its operations and provide quality services to banks and other stakeholders. However, banks argue that they are already under pressure to keep costs low and that the new fees will add to their financial burden.
The dispute between FaydaVerse and the banking sector highlights the challenges of implementing digital identity systems in Ethiopia. The national digital identity system was introduced to enhance security and facilitate financial inclusion. However, the introduction of fees for identity checks has raised concerns about the accessibility and affordability of these services.
The Bankers Association has called for a review of the fees and a more consultative approach to implementing the charges. The association believes that a dialogue between FaydaVerse and the banking sector is necessary to find a mutually beneficial solution. FaydaVerse has yet to respond to the association's concerns, but the company is expected to engage with the banking sector in the coming weeks.
The outcome of the dispute between FaydaVerse and the banking sector will have implications for the implementation of digital identity systems in Ethiopia. If the fees are implemented as planned, banks may need to adjust their business models to accommodate the new charges. This could lead to increased costs for customers or reduced services for low-income households.
The introduction of fees for digital identity checks is part of a broader trend towards commercialization of state-owned enterprises in Ethiopia. The government has been working to transform these entities into modern and competitive businesses, but the process has been challenging. The dispute between FaydaVerse and the banking sector highlights the need for effective communication and consultation between stakeholders.
Key points
- The Bankers Association has expressed concerns that the fees are high and unconsulted.
- FaydaVerse claims the fees are necessary to sustain its operations.
- The dispute highlights the challenges of implementing digital identity systems in Ethiopia.
