“We aim to create new solutions and use cases that capitalize on Egypt’s real-time payments infrastructure, ushering in a new era of digital payment services.”
Mastercard has partnered with the Egyptian Banks Company (EBC), the leading payments network and domestic operator in Egypt.
The move is aimed at supporting sustainable economic growth by enhancing the digital payments ecosystem and fostering inclusive economic development in the country.
Mastercard has been working with the Central Bank of Egypt (CBE) and EBC to support the implementation of card tokenization regulations, providing necessary infrastructure to issuing banks. This initiative is expected to be launched in 2024.
Mastercard’s active involvement with Egypt may help the country better deal with its recent Forex issues.
Egypt limiting FX transactions since October 2023
In response to a foreign exchange crunch, in October 2023, Egypt imposed significant restrictions on foreign currency transactions through credit and debit cards.
The Central Bank of Egypt directed commercial banks to limit customers’ foreign currency transactions, both within Egypt and abroad, to tackle the issue. This directive included suspending the use of Egyptian pound debit cards for purchases outside the country and imposing restrictions on credit card transactions in foreign currencies.
Specifically, domestic transactions using credit cards have been capped at the equivalent of $250 per month. This move was partly to curb speculators from misusing these cards for cash withdrawals abroad without actually traveling. The restrictions aim to prevent the outflow of foreign currency and address the misuse of the banking system for obtaining foreign currency at the official exchange rate, which significantly differs from the higher rates on the black market.
Banks have also introduced limits for travelers, with some banks setting caps on foreign currency spending within Egypt as low as $65 and international spending limits reduced to $50 for cash withdrawals and $100 for point-of-sale (PoS) purchases, with a monthly limit of $500.
Forex issues in Egypt have led to a broader economic impact, including a slowdown and increasing inflation. The government has been taking steps to manage the situation, such as securing more funding from foreign institutions and prioritizing the use of foreign currency for essential imports. These banking restrictions are part of Egypt’s efforts to stabilize its economy and manage its foreign exchange reserves effectively.
Tokenization on its way to Egypt
Tarek Raouf, Executive Chairman and CEO, EBC, commented: “EBC serves as the technological arm of the Central Bank of Egypt entrusted with developing and operating the national payment scheme and fostering the adoption of electronic payments. The collaboration with Mastercard represents an important juncture in the development of Egypt’s payments ecosystem. Mastercard and EBC jointly work towards building digital payments infrastructure, establishing the wallets ecosystem, and pioneering advancements in tokenization. We have always believed that great value created through the successful partnerships between national and global enterprises, and we trust that this collaboration will reflect positively on driving the future of digital payments in Egypt.”
Khalid Elgibali, Division President, MENA, Mastercard, added: “Over the past two decades, Mastercard has been actively involved in introducing cutting-edge digital payment solutions into the Egyptian landscape, steadfastly aligning with the government’s vision for a financially and digitally inclusive future. This collaboration is set to play a pivotal role in shaping the digital payments landscape, fostering financial inclusion, and contributing to sustainable economic growth in Egypt.”
Ahmed Rabea, Managing Director, EBC, stated: “Our collaboration with Mastercard affirms our long-standing cooperation and aligns with our strategy to further collaboration with global payment leaders. By leveraging expertise and international reach, we look forward to paving the way for a new era of digital payments and services, and creating innovative solutions for the benefit of millions of customers.”
Adam Jones, Country General Manager, MENA Central, Mastercard added: “In this collaboration, Mastercard brings its global expertise to complement the innovative technology infrastructure that EBC has successfully developed. Together, we aim to create new solutions and use cases that capitalize on Egypt’s real-time payments infrastructure, ushering in a new era of digital payment services.”