Why Are Ethiopia’s Remittance Apps Fast but Still Unreliable?
By Mintesinot Nigussie
Published on 10/13/25
The era belongs to remittance apps that make it easier than ever for people to send money back home. Gone are the days when those living abroad had to drive miles to find a store that facilitated money transfers for their families. The technology is here — but this nascent industry in Ethiopia still has a few steps to go before it becomes truly reliable.
Dawit Digafe, an Ethiopian living in Washington, D.C., runs a digital marketing consultancy that employs more than ten people in Ethiopia, all working remotely for international clients. For him, sending money home should be as seamless as the work his team delivers online. Yet despite advances in Ethiopia’s financial sector and improvements in remittance platforms, reliability remains a hurdle.
“Sometimes they work well, but the next day they may not,” Digafe says. “Occasionally, the application takes the money but fails to send a confirmation. In that case, I have no idea whether the money reached the receiver.”
This comes amid a surge in remittance platforms following the government’s liberalization of the birr in July 2024. In the months after the float, many shifted from traditional banks and informal channels to digital platforms such as Telebirr, FrankRemit, Cashgo, SmilePay, and FastPay. Dawit says the difference is tangible. “For business owners who have employees in Ethiopia, the new digital money transfer apps are cheaper and more convenient,” he notes.
Both banks and digital platforms have responded to this growing demand with incentives. Banks are waiving transaction fees and offering preferential exchange rates, while digital platforms provide zero-fee transfers, instant confirmations, cashback and loyalty programs, and integration with multiple local banks and mobile wallets.
Yet despite these measures, uptake has fallen short of expectations. Abay Sime, Director of Digital Customer Acquisition at Bank of Abyssinia, acknowledged the efforts but admitted, “We are not meeting our expectations from the diaspora community.” He added that while the bank has a platform for customer complaints, “we haven’t received any major issues on our app,” he said in an exclusive interview.
Nahom Degene, IT Risk Manager at Bunna Bank, said mobile banking applications are evaluated using the CIA framework—confidentiality, integrity, and availability. Availability, he explained, refers to customers being able to access services whenever needed. “They are encountering availability problems, which stem from various factors, including the infrastructural capacity of both the company and the country,” he said.
Degene noted that platforms rely on infrastructure such as hardware, operating systems, networks, and databases. “All of this requires resources. When these infrastructural elements fail to meet customer demand, availability issues arise,” he added. He also highlighted inefficiencies in building the front-end applications as another challenge, one that affects both user experience and reliability.
“If the sender receives confirmation via email, it points to a technical issue on the service provider’s side that prevents the receiver from getting confirmation. If it’s via SMS, however, the problem may lie in the external relationship between the service provider and the telecom operator,” Degene explained.
“The main source of the apps’ unreliability stems from the divergence between the black-market and official exchange rates,” said Tinsae Desalegn, CEO of SantimPay, the developer of FrankRemit.
Desalegn added that members of the Ethiopian diaspora often face delays when transferring funds home. “FrankRemit now completes transfers instantly, within a second. Streamlining this process helps bridge existing gaps, and improving system efficiency remains essential,” he said.
Aisha Mohammed, 25, a backend developer for a U.S.-based company, usually receives her salary directly on her phone, wherever she is. However, she said that because some digital platforms are not working properly, her sender has had to rely on traditional channels such as Western Union. “I felt like I had gone a century back—filling out cumbersome forms, heading to a bank, and waiting in long queues,” she said. “And even after all that, the system isn’t efficient. The inefficiency made the process even more exasperating.”
Digafe pointed out that one of the best things about digital remittance apps is the cost. Sending money through Western Union, he said, can end up costing an extra 10%, which quickly adds up compared to using the apps.
Still, experts note that competition with established operators such as Western Union is fierce for Ethiopian fintech remittance startups. The incumbents’ extensive networks, long-standing brand recognition, and decades of trust make it difficult for new digital platforms to capture a significant share of the diaspora market, despite lower costs and faster transfers. “The competition is fierce,” Desalegn said, adding that innovative products are emerging to challenge the incumbents. “We’ve seen growing transactions on our platform. As this continues, it will strengthen us and enable us to compete with these giants.”
Despite the boom in digital remittance platforms, many Ethiopians abroad remain hesitant to use formal channels. Banks and fintech platforms are not just financial tools but visible systems that can feel risky—whether due to fear of scrutiny, taxation, or past disappointments. Informal networks succeed not only because they are faster or cheaper, but because they are relational and trusted. Transactions carry emotional as well as financial weight. For many diaspora households, privacy, familiarity, and personal connections outweigh sleek interfaces or lower fees, leaving formal channels underused despite technological improvements.
Fintechs are indeed growing, especially in the remittance space, as the government works to channel more diaspora funds through official avenues. But unless platforms address persistent reliability issues, customers are likely to remain drawn to informal systems that offer familiarity, trust, and certainty over speed and cost alone.
“Ethiopia lacks a communication standard dictating how operators should interface with other apps. Most banks and fintechs integrate Application Programming Interfaces (APIs) according to their own procedures,” Degene said. He added that there is no robust or continuous testing of these platforms. “Currently, the focus is primarily on operational functionality rather than ongoing reliability,” he noted. Degene also emphasized that the country’s telecom infrastructure requires further development to support consistent and dependable digital financial services.
Ethiopia’s remittance sector is caught in a structural bind—where decades of entrenched informal practices collide with aggressive government enforcement. Authorities recently froze around 140 accounts linked to parallel market activity, signaling zero tolerance for illegal foreign exchange dealings. Yet the problem runs deeper than enforcement. Structural pressures continue to push individuals and businesses toward informal channels, while reports suggest some bank staff are complicit in these schemes. Official channels struggle to attract users, speculation thrives, and policy interventions alone cannot untangle habits embedded over decades. Unless fintechs and banks fix the persistent unreliability of their applications, these gaps will only add salt to the wound—further eroding trust in formal remittance systems.