Exclusive: Ethiopian Fintech Startup YaYa Wallet Secures Mobile Money License

YaYa Payment Instrument Issuer Share Company (YaYa Wallet) has obtained a mobile money license from the National Bank of Ethiopia. The fintech startup received the license in November 2023 and is now preparing for pilot testing with the aim of acquiring a commercialization permit in the coming months.

YaYa Wallet, accessible through an app and USSD, will have features such as money transfers, bill payments, merchant payments, savings and loans, pensions, remittance and Equb (peer-to-peer saving groups). With a subscribed and paid capital of 75 million birr, the startup has successfully raised 50 million birr from around 50 shareholders.

“Currently, YaYa Wallet is in the process of establishing offices, building its team, and setting up its data center. After completing integration with EthSwitch, banks, and payment gateways, we will commence pilot testing,” said Gashawutena Amdetsion, CEO of YaYa Wallet, in an interview with Shega.

“Our top priority is addressing the market,” he added.

The term “YaYa” in Amharic is an affectionate or familiar term used to address a father or sometimes an older brother. The name indicates the familial and aspirational nature of YaYa, signifying that we are a platform for all,” Gashawutena explained.

YaYa was co-founded by Anteneh Gebeyaw and Workineh Kassa, both of whom boast decades of experience in technology and finance. Anteneh, based in Italy, holds a degree in computer science and computer engineering and has a track record of building various SaaS products. Workineh, based in the US, brings over 14 years of experience in finance. Gashawutena, YaYa’s CEO, has 20 years of banking industry experience, having served as Vice President of Nib Bank for 14 years.

“We have a simple design that accommodates both new and existing mobile money users,” Anteneh told Shega. Key features of YaYa include recurring payments, QR codes, fingerprint authentication, transaction management, and NFC (near-field communication) for contactless payments.

“Using NFC, users will be able to make payments at terminals like bus and train stations by simply swiping their phones at payment terminals,” Anteneh explained.

YaYa is designed to operate cross-border, allowing Ethiopian diaspora members to register with their foreign phone numbers and transact by topping up using their debit or credit cards, PayPal, and other channels.

YaYa enters a mobile money market that currently has three other players, with Ethio Telecom holding a significant share. Ethio Telecom reported a user base of 34.3 million subscribers for telebirr, with a total transaction value of 679.2 billion birr by the end of June 2023.

Kacha Digital Financial Service, the first private mobile money service provider, received approval from the National Bank of Ethiopia (NBE) to launch full-scale commercial operations in August. Safaricom also launched its mobile money platform, M-PESA, in Ethiopia in the same month, transacting $287 million (16 billion birr) within three months.

YaYa believes there is room for both competition and collaboration in the market. “There are still few players for a country like Ethiopia and the competition would be based on availing simple product and services,” Anteneh added. 

A recent GSMA report suggests that mobile money has the potential to contribute $5.3 billion to Ethiopia’s GDP.

According to the report, by 2030, if mobile money achieves a high adoption rate with 60% of Ethiopian adults as users, it could help lift 700,000 people out of extreme poverty, add $5.3 billion to the country’s GDP, increase tax revenue by $300 million, and provide a safety net for nearly 40% of Ethiopian households during economic shocks.

However, the report emphasizes that the extent of mobile money adoption in Ethiopia depends on several enabling factors, including connectivity, affordability, digital literacy, interoperability, use cases, and policy.