Somalia's first ever debit card system has been launched.

Dahabshiil, the largest international money transfer business in the Horn of Africa, has launched an "eCash" service that will enable Somalis to pay for goods and services at participating vendors, gas stations, hotels and restaurants.

Analysts say providing Somalis with the ability to make and receive electronic payments has the potential to revolutionize the way money is transferred.

"It's a miracle, really just a major development," Bashir Goth, a Somali analyst, blogger and the editor of Awdal News, told The Media Line. "Remember this is a country that for the time being doesn't even have a banking system. Now suddenly people can have debit cards and within minutes Somalis overseas can send money home. It's amazing and will facilitate a lot of business."

Ahmed Egal, a Somali businessman, agreed that the Dahabshiil move was a major event in Somali banking history.

"For someone in Somalia who gets a monthly transfer from someone abroad, this new debit card system can serve as an excellent way for the recipients to access the money," Egal told The Media Line. "At the moment there are basically lots of female money exchangers who sit in the markets with huge stacks of cash. The benefit with this system will simply be not having to stand in long lines, and on the other end not having to wait to see if the funds have been received."

Dahabshiil's eCash service, initially launched in the breakaway Somaliland region, will provide Somalis with a card they can use to withdraw cash or electronically purchase various goods and services. While the initial launch focuses on larger consumer vendors with electricity and Internet access, Dahabshiil has plans to allow Somalis to use the service to pay Somali tuition fees. The system, which is encrypted and requires both PIN and signature authorizations, will be fully integrated with Dahabshiil's already dominant global remittance system.

In a region with limited penetration of traditional banking, simple electronic money systems have grown recently in a number of east African markets, with a number of countries offering mobile services in which money can be sent, received and stored using cell phones.

No such services have reached Somalia, however, despite an estimated $1 billion sent to Somalis each year from family and friends in the U.S., UK, E.U. and the Gulf. The vast majority of that money is sent using Dahabshiil.

"It hasn't been easy and we have invested a lot of money and time," Abdi Rashid Duale, Dahabshiil's CEO, told The Media Line. "But people tell us they have been waiting for such a system for a very long time and we believe this system will help the community we serve."

"Things are not going to change overnight and there is a long way to go but at the end of the day this is going to help those in the business community, especially small businesses," Duale said. "So far the response from the public has been extremely positive and we are very proud."

Operating in over 40 countries, Dahabshiil has seen marked success in the Horn of Africa.

"Dahabshiil is the principal money exchange system for Somalis throughout the world to remit money home to their loved ones," Egal said. "A large portion of the country survives on these remittances, and Dahabshiil controls some 80% of the market."

"For all intents and purposes Dahabshiil is a bank and may soon effectively be the national bank of the country," Egal claimed. "Dahabshiil has basically been operating a checking account for all international organizations working in Somalia for at least ten years."

"For years I have been trying to convince Dahabshiil that they should make themselves into a bank," Egal said. "I understand they are finally doing that and have bought a license for banking in Djibouti."

"If Dahabshiil were a bank, they would be plugged into the international financial system," Egal argued. "This will greatly aid businessmen in Somalia and essentially allow anyone in the world to make contact with people in Somalia."

EJ Hogendoorn, the Horn of Africa Project Director for the International Crises Group, argued that Dahabshiil's success has been in the company's willingness to operate in risky environments to providing basic financial services.

"It fills a vital need for your average Somali, a vast majority of whom depend on remittances from abroad, in that they now have access to banking services that were not available to them," Hogendoorn told The Media Line. "One of the problems in Somalia is you have an almost entirely informal banking system and we know that in other African contexts these kinds of banking systems are a huge help to poor people."

"The biggest problem for business in Somalia is of course risk," Hoggendoorn added. "The nice thing about these services is they don't take a lot of investment to set up, and the reason Dahabshiil has been so successful is that they are willing to operate in a relatively risky environment."