In conjunction with the International Bank of Somalia, Visa has launched Somalia’s first Visa card payment service. Both entities claim the partnership would open up Somalia to cashless payment services for international and local transactions.
Through this partnership, IBS Bank will offer Visa card services to its customers. This is expected to boost confidence in the country’s financial and banking sector.
“For Visa to come to Somalia, it means that we are on the right path of growth and progress. We will continue to make partnerships and bring convenient and innovative financial solutions to the people.” Mahat Mohamed CEO of IBS Bank
Somalia, a country with no formal banking or financial system, is slowly making progress in rebuilding its financial entities since the collapse of the government and financial services system in 1991. In October 2014, the country’s first-ever Automated Teller Machine was installed by Salaam Bank to facilitate cash withdrawals for diaspora returnees and foreigners.
A year later, in June 2015, to be precise, MasterCard broke into the country courtesy of a partnership with Premier Bank. MasterCard became the first international payment network to enter the Somali market and issued 5,000 debit cards to Premier Bank account holders for domestic transactions.
“New players are coming on board now. Two years ago, we had about five licensed banks, and today we are talking of 13 licensed commercial banks. That goes to demonstrate the appetite that is there.”
According to Somalia’s central bank governor, Abdirahman Mohamed Abdullahi, the launch signals growing confidence in the country’s banking and finance sector, and he believes other developments are on the way.
He says, “As the Central Bank of Somalia, we plan to install an electronic verification system that will ease biometric identification of customers opening bank accounts or transacting in Somalia. We believe this will help to build international trust and confidence in transactions originating from Somalia to other financial markets.”
Somalia in focus
GDP: $4.918 billion in 2020 compared to $4.942 billion in 2019
Population: 15,893,219 in 2020 compared to 15,442,906 in 2019
GDP per capita: $309.415 in 2020 compared to $320.038 in 2019