On Feb. 6, Maait issued a decree setting the maximum legally admissible cash payment at 500 Egyptian pounds (about $29) for government services. It seems people with high income will be those mainly having to resort to e-payments, as those with a middle or limited income are unlikely to have payments for the government exceeding 500 Egyptian pounds.

The law stipulates that all entities use e-payment to pay fees for government entities or syndicates for services such as electricity, natural gas, water and sanitation; different products; or fees for syndical memberships that exceed the legally specified ceilings.

On March 11, Egypt’s parliament voted in favor of the E-Payments Act, which regulates cashless payments. The law includes 13 articles requiring all government, private and public institutions, syndicates, and any other private or public entity to electronically pay taxes; customs fees; purchase, sales and rent fees; usufruct rights; bank loans; insurance premiums; and payments for electric, natural gas, water and sanitation services. E-payment is to be used in the abovementioned cases whenever the fees exceed the amount specified by the act or by a decision issued by the Minister of Finance.

In addition to leaders of the IMF and the World Bank, the yearly Spring Meetings are held between governors of central banks and ministers of finance from all over the world, as well as many economic experts. The meetings discuss the main economic challenges facing the world, including poverty, development and the effects of the funds offered by both the IMF and World Bank.

CAIRO — Despite people’s concerns over the digitization of payments, Egyptian Minister of Finance Mohamed Maait affirmed April 16 that the Egyptian government is to implement the E-Payments Act as of May 2019. Maait made his statement during a meeting that grouped ministers of finance and central bank governors from across the Middle East-North Africa region. The managing director and chairwoman of the International Monetary Fund (IMF), Christine Lagarde, also attended the meeting, which was part of the 2019 Annual and Spring Meetings of the IMF and the World Bank, held from April 8-14 in Washington, DC.

The law is binding and sets a fine for everyone who breaks it. The fine is no less than 1% of the payments due and is not more than 1 million Egyptian pounds (around $58,000) in the case of big payments like taxes, customs fees, wages, insurance or rent.

Professor of economics at the University of Cairo and member of parliament’s economic committee Bosna Fahmy told Al-Monitor, “The E-Payments Act will help the government fight corruption among employees who could sometimes ask for bribes from people to provide quicker services or to help them with tax evasion. The act achieves that by preventing taxpayers from directly dealing with any employee. Instead, they make their payments through the e-payments system.”

Representative of parliament's economic committee Amru al-Jawhari told Al-Monitor that “the e-payment system will improve financial inclusion as it will push each citizen or company, no matter how small it is, to set up a bank account through which it would perform its electronic transactions and dues. This would increase banks’ revenues, and by doing so it will increase banks’ abilities to support new investments across sectors and grant loans to small- and medium-sized businesses.”

Jawhari said this is a way to achieve sustainable development, increase growth and reduce unemployment rates.

CEO of Fawry (Egypt's leading e-payment network) Ahraf Sabry told Al-Monitor that the new E-Payments Act should have been adopted even earlier for a country as big as Egypt and with such a high population. He said the population density only meant that crowds would form around different government payment points and offices and cause heavy traffic on the roads leading to those places. He affirmed that this situation drained the government and the people as it wasted millions of hours of work. Now, this time will be invested in adding billions of Egyptian pounds that would be used instead of wasted in government centers, he concluded.

However, the E-Payments Act has its flaws, and there are some concerns about its application. A government employee who collects electricity bills in one of the high-class streets of Cairo warned about the dangers of this law as it would lead to many government employees losing their jobs as per the Civil Service Law of 2017, which regulates the conditions for early pensions. Many government employees work as collectors of fees or taxes.

The employee told Al-Monitor on condition of anonymity, “Most bills that I collect are higher than 500 [Egyptian pounds], so what will I do when they suspend the collection of such bills in cash? I will be unemployed.”

Another employee working with the Egyptian Civil Registry disagreed with this point. He told Al-Monitor on condition of anonymity that by imposing e-payments, the government is trying to relieve the burden of people. Yet as a citizen, he will have some difficulties applying the law as he is not aptly skilled with the internet to complete e-payments.

The employee added, “Many people in Egypt have no internet coverage where they live and no bank accounts. So before the law is applied, the government has to make sure to expand internet coverage to all areas in Egypt and train people on internet use and e-banking.”

It seems that the government has already accounted for that. Mohamed Badraoui, member of parliament’s economic committee, stated during a press conference March 9 that the Ministry of Finance issued a decree excluding, until the situation is improved, some regions from the scope of the law — namely those with specific security situations like the Sinai Peninsula and isolated rural areas that have no internet coverage in Upper Egypt.

The law excludes those rural areas. For people in Cairo who have no internet access or bank accounts, the law states that they must have access to these options by May 1.

The law applies to any payment exceeding 500 (Egyptian pounds) as a first phase. But the government is working on applying the law on all payments by 2022.