Since 2019, Lebanon’s Central Bank (Banque du Liban) has granted licenses to 19 financial companies to launch e-wallets. However, contrary to the global model, Lebanon’s two local telecom operators, Alfa and touch, have not been among them.
Following the collapse of Lebanon’s banking sector in the same year, depositors’ trust in banks, which had confiscated their funds, was severely shaken. As the crisis worsened, and with the absence of a reliable financial institution that residents in Lebanon could use to conduct their financial transactions securely, the country entered the era of e-wallets.
E-wallets are digital payment systems enabling users to conduct transactions such as online shopping, bill payments, and more via their mobile phones.
To this day, Lebanon’s two mobile operators have yet to launch their e-wallets, failing to prioritize the interests of users and the public treasury.
Why should Alfa and touch create e-wallets?
E-wallets are considered a core service provided by telecom companies to their subscribers in many countries. According to several MPs and experts, Lebanon’s two telecom companies have an exclusive opportunity to offer this service, which is unavailable to money transfer companies.
This would regulate all financial transfers, prevent tax evasion, generate revenues from transaction fees, and protect the data of five million subscribers. Additionally, it would enhance the expertise of the companies’ employees and increase their market value.
Telecom companies launching e-wallets aligns with global industry trends and does not conflict with banks’ interests in Lebanon. According to telecommunications expert and former touch CEO Wassim Mansour, this step is essential for telecom operators to continue offering new services.
“When a telecom company creates its own e-wallet, it provides an internal service that adds to the core offerings available to users. This step would generate much-needed revenue for the sector, especially amid the current circumstances.”
“Launching e-wallets by Alfa and Touch would also help alleviate financial burdens on subscribers, who are already struggling with the high cost of telecom services coupled with limited purchasing power in Lebanon,” Mansour told SMEX.
Furthermore, opening up a new financial services market benefits mobile operators and users and expands e-commerce opportunities, Mansour explained. By partnering with commercial institutions, telecom companies would allow their subscribers to shop and complete financial transactions using the funds stored in their e-wallets.
This would mark the birth of a new economic model and a shift in how we perceive cash transactions and the relationship between telecom companies, subscribers, and commercial markets.
No Logical Justification for Blocking the Plan
The circulars issued by the Banque du Liban encouraging the transition to a digital economy have not been enough to prompt the country’s two mobile operators to launch their e-wallets.
Instead, former Minister of Telecommunications Johnny Corm deliberately placed obstacles in their way. As a result, Alfa and touch were stripped of the right to create their e-wallets, and the responsibility was handed over to financial institutions, including the company Suyool.
After reviewing Suyool’s proposal—portrayed as the only viable provider of this service instead of Alfa—Jean Ellieh, head of the Public Procurement Authority, recommended that “the two telecom companies should provide the service, as this would generate additional revenue for the state treasury and ensure the protection of mobile network users’ data.”
Ellieh supported his recommendation with expert opinions, proposing an open tender to attract global companies specializing in e-wallet software. The company offering the most competitive rate, meaning the lowest fee per transaction, would be selected.
However, former Minister Johnny Corm embraced claims that the telecom companies were incapable of handling this project, opting instead to entrust it to a “competing partner” from among licensed money transfer institutions. Additionally, he actively worked to discredit the Public Procurement Authority’s recommendation, attempting to strip it of its legal validity.
Corm’s justifications were inconsistent and baseless. Initially, he argued that the Banque du Liban had not granted Alfa and touch the necessary licenses to launch their e-wallets. However, it later emerged that no such license request had ever been submitted in the first place. He then claimed he did not trust the capabilities of Alfa and Touch to implement this project, before arguing that the companies lacked the financial resources and time to undertake an e-wallet project.
Not only are there no valid reasons to prevent the two telecom companies from launching their e-wallets, but there is also a pressing need to move forward with this project.
Risking Mobile User Data
Beyond their potential to revitalize the telecom sector through new revenue streams, e-wallets are an essential service that telecom companies should provide. However, a major concern remains: user data privacy. If the responsibility for creating Alfa and touch’s e-wallets is handed over to a third party, users’ sensitive data will be put at serious risk.
For any company to develop an e-wallet for the telecom operators, it would need access to their customer data. This means that highly sensitive information would end up in foreign hands, posing a significant threat to both the data itself and its owners.
SMEX policy analyst Metehan Durmaz highlights this particular concern, noting that outsourcing the development of the e-wallet system to a foreign company, rather than keeping it under local telecom operators, poses severe risks regarding compliance with local regulations and overall user protection.
According to Durmaz, under such an arrangement, users’ sensitive financial and personal data would be transferred to an entity that might not be fully subject to Lebanon’s legal and regulatory frameworks. Without clear data localization, security, and oversight guarantees, this could lead to user privacy violations and weaken Lebanon’s control over its financial infrastructure.
“In such a case, the licenses granted by the Banque du Liban would provide legal protection only to the foreign company, ultimately increasing risks instead of mitigating them. Therefore, ensuring that e-wallets are developed and managed locally is crucial.
The global trend in the digital world is now shifting toward localizing digital infrastructure and core digital services, and Lebanon must not fall behind. This is of utmost importance in maintaining financial independence and protecting user data from external influence,” Durmaz added.
Recommendations for the New Minister of Telecommunications
With the formation of a new government and the appointment of a new Minister of Telecommunications, the relevant authorities must take serious steps to resolve this issue and remove all obstacles that continue to prevent Lebanon’s two telecom operators from launching their e-wallets.
According to Mansour, the first step should be for the government, the Ministry of Telecommunications, and the two mobile operators to immediately draft a specifications booklet to kickstart the process of launching their e-wallet service.
This can be done by inviting telecom investment firms specializing in this type of service, particularly those operating on a Software-as-a-Service (SaaS) model. Under this system, user data would not be shared with third parties, and the state treasury would not have to split its revenues with a private company. Instead, the service provider would simply charge a fee for each financial transaction conducted through the e-wallet.
Mansour explains that these companies are the ideal choice in this case because their role would not be limited to providing the software platform; they would also continue to develop and implement the system while transferring their expertise and capabilities to the local workforce within Lebanon’s telecom companies.
By taking these steps, the government would ensure transparency by creating a specifications booklet and organizing legal tenders to select the service providers. Additionally, it would protect user data, equip local telecom employees with new skills, and ensure that all revenues from this service remain within the state treasury.
