CBE Switching Systems in Bid for World Class Status

In a bid to transform the existing seven-year-old SWITCH system, the Commercial Bank of Ethiopia is close to finalising a procurement process that has been taking place since May 2016. The SWITCH system, which will integrate transactions made via Automated Teller Machines (ATM) and Point of Sales (PoS), is estimated to cost four to five million dollars.

After a month of technical evaluations, the Bank passed just a single bidder – the US-based, ACI Worldwide – on to the next round of three.

The Bank invited international vendors directly to participate in the bid, with three having responded to the call. These were the well-known SWITCH system vendors BPC Group, ACI Worldwide and Cisco Systems Inc. The suppliers submitted their proposals in early May.

For CBE, this purchase is a part of its plan to attain world class status by 2020. It will replace the old system. which was installed by the international M2M Group and its then local agent Moti Engineering Plc. Back then, the intention and initial design intended the SWITCH system to integrate 50 ATMs, 250 PoS and 50,000 cards.

“These figures were very conservative,” said a source involved in the process.

In the following years, the Bank made an aggressive expansion in terms of its reach via these tools. The two parties delivered a Magix SWITCH system at a total cost of 900,000 dollars, including its implementation and licences.

For this bid, Moti has partnered with Cisco – the same company that did Wegagen Bank’s e-transaction solution. Based in California, US Cisco was established back in 1984. The multibillion dollar company reported a revenue of 49.1 billion dollars in 2015.

BPC, a company from Switzerland, who entered the field in 1995, has joined a local IT vendor, SS Communication Plc. This company is the IT firm behind the national SWITCH system, which was launched recently to integrate the electronic transactions of banks.

The oldest of all, ACI, with four decades of experience, bagged 865 million dollars in revenue back in 2013. ACI is yet to bring in its own local partner.

The bid, which started with technical evaluations, has dedicated 65 points to a list of complaint points. The technical evaluation is also divided among technical and non-technical points. Non-technical points include issues such as staff strength and company profile, as well as the total number of implementation sites. These points carried a total of 28 points, while the rest went to other components of the competition.

With regards to implementation sites, the bid specifically put 300 as a minimum standard. A company that has fulfilled this number gets five points and less than this gets zero.

In this respect, some of the participants, whose names have been withheld upon request, told Fortune that the requirements look as though they were intentionally made to favour one bidder.

Out of the 65 points, only a successful bidder to achieve 60 and above would pass to the next stage.

Fortunately for ACI, it become the only bidder to do so, with 60.92 points, and passed to the next step alone. This will grant the company the freedom to give its financial offers without any competition. The other two bidding companies, BPC and CISCO, were awarded 54 and 56.9 points, respectively.

Following the announcement, a source told Fortune that some of the bidders had already appealed to the Bank on irregularities they claimed happened during the evaluation.

This new SWITCH system will be designed to accommodate 3,000 ATMs, 30,000 PoS and 10 million cards. Currently, the Bank deploys 1,027 ATMs and 4,458 PoS.


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