Since ATM's were introduced to the banking system in Ethiopia almost a decade ago, people have enjoyed the ease in which they can access their accounts. More customers have become accustomed to using an ATM machine nearby to make a quick withdrawal. But, lately, ATM's around Addis Abeba have been experiencing glitchs leading to dysfunctional and unpredictable service. Now they are causing problems for customers trying to withdraw money, with some not being able to get their cash, a MENNA ASRAT, FORTUNE STAFF WRITER reports
Temperamental and out of service ATMs are not new to bank customers in Addis Abeba. But the latest reports involve a new problem: machines have reportedly not been giving customers the cash that they request. There doesn’t seem to be any uniformity in the amount of money that customers have lost. Some who spoke with Fortune report amounts as high as 5000 Br and low as 500 Br. The story that customers tell however, is the same almost every time.
“I tried to withdraw about 4000 Br from an ATM,” says Azeb Tefera. “It was shocking for me to not receive my money.”
As she was using an ATM that is owned by another bank, the process to get her account recredited was drawn out.
On another afternoon on Asmara road, and bank customers were queuing up to use one ATM; the only one in the available bank of ATMs that was currently working. While lines like this are not rare sights in Addis Abeba, lately the reports that ATMs and bank systems are causing errors and inconvenience have been rapidly spreading across the city, almost as fast as ATM services.
A particularly visible rash of ATM issues came up in early December 2016. There were long lines to use the one functioning ATM at the Commercial Bank of Ethiopia branch in the area known as Balderas, on Cote D’Ivoire Street. Customers lined up for long periods of time to withdraw their money. Not-so-hushed conversations about the latest issues that friends and relatives have been experiencing with ATMs were, as usual, fare for gossip in line.
“I was nervous,” said 30-year-old Tigist Belay after she finished withdrawing her money at the machine. “I heard about ATMs not giving people their money. I was happy when I got mine.”
Although she is not a customer of CBE, she uses their ATMs for convenience.
“It makes it easier for me. That way I don’t have to go around town looking for my own bank’s ATM to use,” she added.
There are about 1,700 ATMs in Ethiopia, making the ATM to population ratio 1: 54,117, well below the world average of 1:2325. The Commercial Bank of Ethiopia was the first bank to roll out ATMs to its customers, beginning service in late 2005. The Bank currently owns more than half of all the ATMs in the country.
ATM outages are part and parcel of any financial system. And with the Ethiopian banking system rapidly changing and spreading to meet the demands of customers across the country, these new complaints are becoming part of the package as well.
“I used the machine as normal,” said a Commercial Bank of Ethiopia (CBE) customer, who wished to remain anonymous.
“First it wouldn’t return my card. Then it wouldn’t give me the 3000 Br I requested, but it still took it from my account. It took almost three weeks for the bank to address my complaint.”
However, not all banks are seeing issues with their customers.
“We do not often have issues with our ATMs,” says Girum Bogale, head of the E-Commerce division at Wegagen Bank. “However, if our customers do report any issues with ATMs, we have implemented a system that allows their grievances to be addressed in a timely manner.”
In Wegagen Bank’s system, if a customer experiences issues with an ATM, like having their account debited for money that they did not receive from the machine, they are asked to make a report and their account is re-credited.
However, customers report the most issues when they attempt to use ATMs that are not owned by their own bank.
Bank ATMs in Ethiopia are linked through a system called Eth-Switch. Eth-Switch is a share company that was founded by the banking industry itself, in order to enhance inter-industry connections and streamline customer service. It was established in 2011 by 16 banks, and a capital of 80.5 million Br, following the recommendations of the National Bank of Ethiopia.
The system allows users of any banks to access their money at any machine in the city, without necessarily having to have an account with the bank. For customers like Tigist, who may not live in the most convenient places to access their own bank’s machines, the system has been a very welcome addition to the banking system.
In cases where there are issues with other banks’ ATMs, customers report, banks don’t re-credit their accounts for anywhere from a week to 10 days at the least, and up to a month at the most.
The reasons for the recently seen issues are still being debated between all the institutions involved.
Some banks and customers are blaming the Eth-Switch network for the problems that users are experiencing. However, the system has no way of changing the requests between one bank and another, according to the system’s developers.
“The system was designed as a platform for banks to communicate with each other about customer accounts,” says a technician who worked on the implementation of the Eth-Switch system.
“It simply transmits messages. It doesn’t change or amend them in anyway. If customers are having issues getting the money they requested, it is because of the bank’s software or the actual machine.”
The Eth-Switch system works by providing an interface for the bank that owns the ATM the user is using, and the user’s own bank to exchange information about the customer’s request from the machine.
However, while Eth-Switch does report networking and connection issues sometimes, they are not of the type that would cause the problems that are being reported, according to industry insiders.
“If customers are experiencing issues with ATMs, then it is most likely an issue with the bank’s own switch system likely coming from improper management and maintenance,” says a financial software expert. “It’s unfair of banks and users to blame the networks for an issue like this.”
There is no consensus about what is causing issues for customers on, even though many have complained to their banks about the issue. And although various bank managers have asserted that there have not been any issues of this kind that they have not dealt with, customers are still telling a different story.
“The manager of the bank told me that it would be dealt with but it has been almost a month,” says Adam Tilahun, who declined to name his bank. He lost 1,000 Br when an ATM debited it from his account without giving him the money.
“The bank has told me that it is communication with the other bank that is taking so much time,” he added.
In spite of the lack of agreement on the causes of the issue, the user experience with ATMs is beginning to sour. The effect on everyday financial interactions in the city will have to be looked at over the long term.
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