Friday, September 4, 2020

e-Payment: Challenges and Opportunities in Ethiopia

Wondwossen Taddesse & Tsegai G. Kidan

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Background

Nowadays, societies have well recognized information and knowledge as invaluable resources. The ‘agricultural age’, the period when majority of workers were farmers, and the ‘industrial age’, the period when work processes were simplified through mechanization and automation, had to pass before the advent of the present 'information age'. The information age began in the 1960s when majority of workers are involved in the creation, distribution, and application of information [1]. The developed countries came through the two preceding ages to reach the information age. The contemporary developing countries, however, host elements from the three ages. There is a mixed sort of development. The trend, nevertheless is that eventually the development of information and communication is to surpass the two and prevail in every aspect of society’s social, political and economic life.

The assumption of perfect knowledge among economic agents made neoclassical economics to avoid studying information and communication. The value of information was traditionally seen as derived exclusively from reducing uncertainty. Since particularly the 1960s, however, economics has paid increasing attention to them [2]. In the Internet economy, information is simultaneously a production asset or an input like natural resources, labor, capital, and entrepreneurship. It is unique from other resources in the sense that it can be used, reused, processed, shared, and exchanged without losing value.

The astonishing growth and sophistication of information and communication technology (ICT) is changing societies' ways of life in various parts of the world. One of the leading areas where this is manifested is the way business is conducted. The growth of the Internet and World Wide Web (WWW) has made electronic commerce (e-commerce) possible. E-Commerce in its simplest sense is trading electronically. It offers consumers and merchants convenience and speed. The success and growth of e-commerce, however, depends on efficient electronic payment (e-payment) system. The slogan ‘it is no e-commerce, if you can’t get paid’ witnesses the importance of e-payment for e-commerce. E-payment, the transfer of value electronically, in turn depends on secure ICT infrastructure, efficient legal and regulatory regime, and widespread awareness among the public and business. In this paper we look at these and other relevant issues from global, African and Ethiopian perspective.

 

 


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