Banking around the clock is no longer a remote possibility. But the banks don't have to keeprntheir branches open 24 hours a day to provide this service. This is one of the biggest advantagesrnof Internet banking.rnAdvances in electronic banking technology have created new ways of handling bankingrntransactions, especially via the online banking channel. In Ethiopia, internet banking is still in itsrnearly stages and it is not utilized as a considerable savings tool in operating costs for banks andrnin improving customer relationships. The intent of this research project is to identify the factorsrnaffecting the adoption of Internet banking by customers in Ethiopia.rnAn understanding of how demographic characteristics, social factors, and consumer perceptionsrnand attitudes towards internet banking influence the adoption of internet banking can allowrnbanks to create solutions and plans to attract consumers to their internet banking services, thusrnenabling them to gain a greater share in the banking market.rnThis study investigates attitudes of retail banking customers in Ethiopia, specifically in AddisrnAbaba, towards the adoption of internet banking. A research framework based on the diffusion ofrninnovation theory was used to identify factors that would influence the adoption of internetrnbanking. This report has reviewed current literature and opinions about this innovative bankingrntechnology. It has also reviewed the factors, including consumer demographic characteristics,rnconsumer perceptions toward internet banking characteristics and social influences that affectrnconsumer adoption of this mode of banking.rnThis study presents both the results of the 400 survey questioners and the analysis of thesernresults, with graphs and figures to determine the extent that the factors studied influencerncustomer adoption of internet banking.rnThe key findings revealed that demographic factors including age, income, education level andrnoccupation have a relationship with the adoption of internet banking. Psychological factorsrnincluding perceived relative advantage, perceived compatibility, perceived complexity, perceivedrnrisk, and perceived cost were found to influence the adoption of internet banking. Socialrninfluences including opinions of friends, parents and colleagues were not found to be significantrnfactors to influence the adoption of internet banking in the Ethiopian context.rnAnd finally possible recommendations were given so that the banking sector in Ethiopia canrnexploit the potential advantages of internet banking to remain competitive