The march toward making Egypt’s economy cashless looks increasingly inevitable under the current administration. “A ‘digital czar’ is [always] at the center of the [digitization] framework. In the case of Egypt, it’s the president [Abdel Fattah el-Sisi],” Driss Temsamani, Citi’s managing director and platform data service head at LATAM and North America, told AmCham Egypt members in April. “You can’t get higher than that.” 

Such a transformation will invariably change aspects of local banks’ business models. “Banks have to become data companies that rely on data collection by scaling digital transactions,” said Temsamani. “That will allow them to build credit profiles … which allows them to lend better.”

To achieve that metamorphosis, commercial banks and non-bank financial institutions need to partner with tech companies. They also need to rethink cybersecurity investment, perceiving it as a “product that generates revenue, not a cost,” said Temsamani. “Having a national digital vision is essential to become a cashless digital economy. Egypt is doing it the right way on the right track.”

When it started

Temsamani believes the inflection point leading to the proliferation of digital banking in Egypt was in 2020 and early 2021, when the country locked down because of the pandemic. “COVID-19 forced us to work and live digitally. We woke up one day [and] realized we are privileged to pay for essentials like food and internet and get paid online.”

Since then, local companies have increasingly digitized their business models and payment systems to cater to that fast-increasing demand. Citi’s data shows the global digital economy has grown 300% in the past 15 years. According to data aggregator Our World in Data, the global physical economy grew 75% during the same period. 

Rising dependence on digital tools in Egypt led to the emergence of increasingly innovative domestic cash collection and disbursement models. “They may still offer financial services like conventional banks, but many are effectively tech companies led by CEOs who are also the company’s chief technology officers,” Temsamani said.

The increasing convergence of technology and financial services led to partnerships between commercial banks, telecom and tech companies, and traditional businesses with payment collection and distribution inefficiencies, Temsamani explained.

The proliferation of such partnerships led the CBE to introduce regulatory reforms to accommodate, build trust and maximize the benefits of digital payments, he said.   

Fast growth

Mohamed Helmy, the CBE’s payment systems general department head, believes Egypt’s digital payment journey started in 2017 with the establishment of the National Council for Payments (NPC). “The president’s chairing of the council showcases how important digital payments [are] and their many use cases,” he said. “You can have knowledge, resources, money and a plan, but with no political will nothing will happen.”

NPC gave the CBE the authority to lead implementation of the national digital payment plan supported by government agencies and ministries. “Building the market infrastructure was the first step,” Helmy noted. “Then there were regulatory frameworks, [setting] limits on transferred amounts, licensing requirements and quality assurance mechanisms.”

Thirdly, there was “building acceptance among citizens and developing instruments like mobile wallets and mobile apps,” Helmy said. “That led to digital innovation as fintech [startups] offered customized tools to meet local users’ demands and preferences.” 

Helmy said the CBE used the Asian banking model to establish know-your-customer (KYC), cash-in and cash-out frameworks without requiring citizens to open personal bank accounts. Instead, digital payment providers partnered with commercial banks to settle transactions “using the same authorization processes and KYC as bank account holders. Customers can go to their mobile operators and open a mobile wallet to transfer cash digitally, automatically making them banked individuals.” 

The biggest boost to Egypt’s digital payment transformation was allowing digital payment of government services. “Government is the biggest merchant and supplier in any country,” said Helmy. “The government has restrictions, incentives and options to urge citizens to pay digitally.”

In 2024, the number of mobile wallet accounts reached 50.4 million, executing 1.9 billion transactions worth EGP 2.7 trillion ($53.2 billion). Instapay, the CBE’s money transfer application, had 12.5 million users executing 1.5 billion transactions worth EGP 2.9 trillion in the same period. “Our main success indicators are the value and number of transactions,” said Helmy. “They are growing rapidly, indicating a high-speed adoption rate.” 

Trusting the system

Abeer Khedr, group head of cybersecurity at the National Bank of Egypt (NBE), told AmCham Egypt members the biggest challenge facing digital payments is protecting transactions from internal and external hacking. “People are entrusting banks with their financial and personal data,” she said. ”We must do our ‘due care’ to protect this information and these funds.”

In addition to having outsiders and insiders attempting to hack the bank’s network, cybercriminals use artificial intelligence to trick bank account holders into legally transferring huge sums to them. “Last year, there was a ‘deepfake’ video of a company’s chief financial officer ordering an employee to transfer $20 million to him,” Khedr said. “Everything was following the correct process and procedure.” 

To avoid such risks, the local banking sector developed “visible security features,” said Khedr. “When someone makes a digital payment, they can see a strong authentication process.” Currently, local banks ask depositors to authenticate transactions away from the firm’s portal or app requesting digital payment. 

Transparency and multiple authentication steps are other ways of gaining locals’ trust, as evidenced by the quick uptake of the Instapay app, said Khedr.

She stressed that the CBE’s Strategic Cybersecurity Framework, introduced in 2022, created solid, unified standards for all local commercial banks to protect digital payment transactions. “The framework has 300 control points spanning different aspects of cybersecurity, technology and process,” Khedr said. “The CBE helped us meet all those ‘control points’ during implementation, especially in technology.”

In addition to individual banks monitoring their own transactions to identify suspicious activity, the CBE is doing the same thing, sending a warning to the commercial bank in question in real-time if they detect unexplained movement of funds. The CBE also sends local banks reports on domestic and regional fraud patterns to help them develop awareness campaigns and take protective steps.

Khedr said the CBE’s cybersecurity strategy ultimately aims for all banks to implement all national security standards effectively and flawlessly. “The new era will see us use AI to detect threats and fraud,” she said. 

Better policy

Temsamani of Citi said encouraging citizens to use digital payment systems is part of the CBE’s monetary policy effectiveness. “Money outside the [banking] system can never become a loan,“ he said. “Hence, financial institutions need attractive digital payment tools to move money circulating outside the banks into the system to turn it into loans.”

In Egypt’s case, “sometimes the only way to get non-banked individuals into the [financial system] is through [fintech and non-bank startups] that address this part of the population,” Temsamani said.

Helmy acknowledged the CBE and commercial banks face nationwide challenges in spreading digital payment usage. The most prominent issue is “the categorization of generations” into Gen X (1965 to 1980), Millennials [1981 to 1996], Gen Z (1997 to 2012) and even Gen Alpha (2013 to 2025). “We need to think like each of them to meet their needs and make their lives easier,” he said.

A second major issue is “interoperability,” where new technology and payment channels can communicate with the legacy versions, Helmy said. 

Ultimately, Temsamani stressed, “It’s just a matter of time for Egypt to reach an inflection point where numbers start to increase significantly, creating real impact in the country’s real and digital economies.”