First ever transfer fees announced by state-owned Instapay

InstaPay, Egypt’s only instant payments app, will introduce transaction fees for the first time starting April 1, the company announced on Tuesday. 

Transfers made through the app will incur a 0.1 percent fee, with a minimum fee of LE0.5 and a maximum of LE20. Users will also be charged  LE0.5 per request for balance inquiries and account statements once they have used the ten free requests per month the company will continue to provide. 

Launched in March 2022, InstaPay is Egypt’s first and only Instant Payments Network (IPS) service. For the past three years, it has operated free of charge. 

In 2024, the platform recorded over 1.5 billion transactions worth a combined LE2.9 trillion, an almost 300 percent increase compared to the previous year. 

InstaPay is owned by Egyptian Banks Company (EBC), a state-owned entity established in the mid-1990s to develop Egypt’s digital payments infrastructure. EBC has developed several services, including mobile wallet transfers and the Meeza payment card system which has supported the digitization of food subsidy and pension payments.

The introduction of fees is expected to move InstaPay toward profitability after years of investment during which the company offered its services for free, financial analyst Hesham Hamdy told Mada Masr. 

Hamdy said the shift could also pave the way for a move toward the company’s privatization in the future, whether by stock market listing or to an investor. He estimated that Instapay could be worth up to US$1 billion.

Egypt’s government designed a state privatization program in 2018 in line with the International Monetary Fund’s recommended reforms, which included Egypt undertaking structural economic adjustments like minimizing the state’s footprint in the economy.

The fintech company eFinance, a state company that prevailed in the digital tax payments environment, took a similar trajectory to that which Hamdy pictures for Instapay.

eFinance, Egypt’s state-controlled digital payments firm, initially owned by a number of state or state-adjacent shareholders, undertook a public offering in 2021.

Considering potential routes forward, a source in the fintech industry said that one option is for Instapay to transition to a Software-as-a-Service model. This would allow banks to integrate InstaPay’s instant payment technology into their own applications for a fee, enabling real-time transactions to customers.

Currently, InstaPay remains the sole IPN service provider in Egypt. Most banks still rely on the Automated Clearing House (ACH) system for transfers via their mobile apps. Though a lower-cost alternative, ACH is slower and only operates during official banking hours.

Over the past three years, the CBE has doubled transfer limits on InstaPay, raising the cap to LE400,000 per month and LE120,000 per day. As transaction volumes continue to rise, so does the need for further investment to expand the app’s capacity, the fintech source noted. However, no official figures have been released on the total investment made in the platform to date.