Disclaimer: The Telebirr logo was used in a previous version of this article. We have since replaced it, as its use created confusion. We apologize to anyone who may have been misled by the inclusion of the logo.

Ethiopia’s push to rein in its fast-expanding digital finance ecosystem took a decisive turn late last year, as the Ministry of Justice ordered all commercial banks to freeze the accounts of ten payment gateway providers and submit exhaustive financial disclosures to federal authorities.

The directive, dated December 29, was signed by Tesfaye Daba Wakjira, State Minister for the Attorney General Division. It instructs banks to immediately block all accounts linked to the named firms and to hand over comprehensive records detailing their financial activities from inception to date.

Who Is Affected?

The order targets some of Ethiopia’s most recognizable digital payment platforms:

• ArifPay
• AddisPay
• FenanPay
• LakiPay
• StarPay
• YagoutPay
• SantimPay
• Kacha
• Chapa Pay
• Sinan Pay

These platforms operate at the heart of Ethiopia’s digital commerce—processing merchant payments, online transactions, and increasingly cross-border inflows for businesses and consumers.

What Banks Are Required to Submit

Beyond freezing the accounts, the Justice Ministry’s order imposes one of the most extensive disclosure requirements yet seen in Ethiopia’s financial sector. Commercial banks must submit:

• Full domestic and foreign currency balances
• Share capital details of the payment firms
• Complete transaction histories from the date each account was opened
• Excel-formatted bank statements
• Know-Your-Customer (KYC) documentation
• Proxy and authorized signatory details, all certified with official bank seals

The scope suggests investigators are seeking to reconstruct the full financial footprint of each company—ownership structures, transaction flows, and potential links to undeclared income streams.

Context: From Selective Unfreezing to Broad Scrutiny

The December 29 directive follows an earlier and seemingly contradictory move. On December 23, authorities ordered the lifting of account freezes on 50 individuals, including Teshome Alemayehu, CEO of YagoutPay. Those accounts had been blocked just three weeks earlier, raising questions at the time about the consistency and clarity of enforcement actions.

The latest order suggests that regulators have now shifted focus from individuals to institutions, zeroing in on payment gateways themselves rather than founders or executives alone.

Allegations Under Investigation

According to officials familiar with the matter, the investigation centers on suspected tax evasion and money laundering, two risks that have grown alongside Ethiopia’s rapidly digitizing economy. As electronic payments scale faster than regulatory capacity, authorities have repeatedly warned that fintech platforms could be misused for:

• Under-reporting taxable income
• Channeling illicit funds through merchant accounts
• Circumventing foreign-exchange controls

The Justice Ministry’s intervention signals a move toward forensic-level oversight, rather than the lighter supervisory approach that characterized the sector’s early growth.

A Turning Point for Ethiopia’s Fintech Sector

Ethiopia’s digital payments industry has expanded at breakneck speed over the past few years, fueled by smartphone adoption, e-commerce growth, and policy support for cashless transactions. Payment gateways have played a pivotal role in this transformation—often operating in regulatory gray areas as laws struggled to keep pace with innovation.

This latest action, however, marks a clear inflection point:

• Regulators are asserting tighter control over fintech intermediaries
• Compliance expectations are being aligned more closely with traditional banking standards
• The cost of regulatory non-compliance is rising sharply

For legitimate operators, the crackdown may ultimately strengthen trust and market stability. For others, it underscores that the era of rapid growth with limited scrutiny is coming to an end.

What Comes Next

As banks submit records and investigators sift through years of financial data, outcomes could range from administrative penalties and tax assessments to criminal prosecutions, depending on findings. The case is also likely to shape future fintech regulation, influencing licensing rules, reporting standards, and enforcement practices across Ethiopia’s digital finance ecosystem.

For now, the message from authorities is unambiguous: innovation is welcome—but not at the expense of transparency, tax compliance, and financial integrity.