Ethiopia has been steadily advancing its digital payments landscape over the past few years. Banks, microfinance institutions, and new market players are working hard to offer customers faster and more reliable ways to move money. But as the sector grows, many institutions face the same behind-the-scenes challenge: connecting their systems to the national Instant Payment System (IPS) in a way that is simple, secure, and doesn’t require major internal restructuring.

EthSwitch’s new middleware initiative was created to address exactly this challenge. AfricaNenda is proud to support this effort and help make the process smoother and more accessible for all institutions wanting to join the instant payments ecosystem.

Why Middleware?

As Ethiopia moves toward more digital services, real-time and interoperable payments are becoming essential. The IPS already provides the foundation for this, but integrating it can be demanding, especially for institutions working with older or less flexible systems. Some are ready to connect quickly; others need more time and resources. This uneven readiness can slow down the expansion of instant payments across the country.

To bridge this gap, EthSwitch started developing a middleware solution in March 2025. The idea is simple: instead of each institution building its own complex integrations, the middleware provides a common, easier pathway to connect to the IPS.

What the Middleware Does

The middleware sits between an institution’s internal system and the IPS. It offers a unified set of APIs, supports ISO 20022 and ISO 8583 messaging, and includes built-in tools for validating security, data formats, and business rules. In practical terms, it removes much of the heavy lifting for institutions, especially when it comes to managing ISO 20022 requirements internally.

With this solution, institutions can use a single, consistent interface to access key IPS services such as person-to-person transfers, merchant payments, bulk payments, and request-to-pay. This helps reduce integration costs, shortens deployment time, and gives institutions a more predictable process as they prepare to go onboard.

Supporting Institutions with Different Levels of Readiness

Across Ethiopia, financial service providers are at different points in their digital transformation journeys. Some already have modern platforms, while others still rely on older systems that are harder to adapt to IPS standards. These disparities can delay onboarding and limit how quickly customers can gain access to real-time payment services.

The middleware helps level the playing field by offering a plug-and-play connection point that meets IPS requirements without forcing institutions to overhaul their own systems. This supports faster onboarding, strengthens the overall reliability of the payment’s ecosystem, and contributes to Ethiopia’s broader push toward inclusive digital financial services.

AfricaNenda is working alongside EthSwitch by providing technical advice, reviewing the solution design, and supporting implementation processes. We are also helping strengthen documentation and knowledge-sharing so institutions can prepare effectively for integration. Our goal is to make the onboarding journey as clear and accessible as possible, especially for institutions that may have limited technical resources.

Where the Project Stands Today

The initiative is progressing through three phases:

1. Phase 1, covering requirements, architecture, and design, is complete.
2. Phase 2 is underway and focuses on development, configuration, API harmonization, and early testing of core use cases.
3. Phase 3 will involve full end-to-end testing, certification, training, and coordinated onboarding waves ahead of go-live.

By simplifying integration, this middleware is expected to speed up how quickly institutions across Ethiopia can join the IPS. This means more people and businesses will have access to instant, low-cost, and secure digital payments—an important step toward a more inclusive digital economy.

By simplifying integration, this middleware will dramatically accelerate how quickly institutions across Ethiopia can join the IPS. This means more people, businesses, and innovators will gain access to instant, low-cost, and secure digital payments, accelerating the country’s transition toward a truly inclusive digital economy.

Stay tuned for more updates on this exciting project!