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Only 2% of total individual payments paid electronically in Egypt
Electronic individual payments can increase by 20% in seven years if supported by government, says Regional Manager of Visa
Published in Daily News Egypt on 03 - 11 - 2015

Total individual payments in Egypt amount to approximately $163bn, only 2% of which is paid electronically, with about 1% by cheques, and the rest in cash, Tarek Al-Husseini, Visa's regional manager for North and West Africa, told Daily News Egypt.
He expects that individual electronic payments in Egypt will reach 20% within five to seven years, as long as the Egyptian government offers support and launches programmes and helps by paying the civil servants' salaries using payroll cards.
Visa Inc. recently signed a cooperation protocol with the Egyptian Banking Institute (EBI) to spread the culture of electronic payments of government salaries. The government and the Central Bank of Egypt (CBE) should aim towards promoting financial inclusion and integrating marginalised financial groups with the official financial sector, Al-Husseini said.
He added that the government payroll cards reflect clear awareness and understanding by the state of the importance of electronic payments and its positive impact on the economy. The state also realises the role of electronic payments in supporting the banking sector, achieving the financial inclusion of different groups, saving huge expenses, and efforts of cash management.
The spread of payroll culture, implemented by Visa in cooperation with EBI, comes in support of the government's approach twoards the goal of financial inclusion and providing financial services and safe payment options for everyone.
Measuring the success of electronic payments in any country is estimated by calculating the proportion of individuals payments made electronically, either via plastic cards, online, via mobile or other means of electronic payment, compared to the total individuals' payment.
The average global rate of individuals' electronic payments is 8%. It is 40% in some countries such as Australia and a number of Scandinavian countries. The average rate declines in other countries, like Egypt where it is only 2%, but can grow to 3%, if cheques are taken into consideration.
El-Husseini said the government accounts for more than 60% of the payment system in Egypt, whether as a recipient of such payments from individuals for services, such as utility bills or for salaries.
There are four essential pillars for the development of electronic payment operations in Egypt; the government's support of electronic payments such as the mechanisation of public employees' salaries, banks' efforts in issuing and accepting cards, dissemination of accepting different payment methods such as cards and mobile, and raising citizens' and government employees' awareness about the importance of electronic payments.
He said each EGP spent in cash loses almost 25% of its value due to the cost of printing currency and securing them, and because of the investments pumped into ATMs for money withdrawal, as well as other costs afforded by banks and the state for using cash.
The CBE recently said that Egypt had around 2.575m cards at the end of June, with debit cards amounting to 16.423m, POS at 55,876 machines, and ATMs at 7,855 machines.
However, Al-Husseini said these figures are not sufficient to achieve any development in government payments or development for financial inclusion, for the state's aims.
Achieving financial inclusion or spreading the culture of electronic payments should be done through gradual and long-term planning that requires linking all parties associated with that system.
The role of National Bank of Egypt (NBE) in spreading electronic payments would have ended if it was not for the bank's own efforts.
He called for the NBE and Banque Misr to continue supporting this system, especially in light of their strong infrastructure.
The new technology of electronic payment, such as paying via phone (MVISA), will cut down much of that cost, which will allow the expansion of electronic payments.
El-Husseini said Visa is undergoing negotiations with 10 banks in the Egyptian market to offer mobile payment technology, also known as MVISA, to work on implementing the technology in different places.
MVISA enables users to carry out transactions, pay bills, and transfer money without using cards, but through a mobile application. Users' Visa accounts can link to the application, making it easier for them to pay for their purchases in shops and over the internet by transferring money from their balance to the merchant's account.

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