Mobile Money Arrives in Zimbabwe

By Chief K.Masimba Biriwasha

Harare, Zimbabwe – Zimbabwe, which has been very slow to uptake new technological innovations, is currently experiencing abuzz with the introduction of mobile money. For a long time, telecoms and mobile institutions have done very little to introduce new innovations. But a new trend is dawning in Zimbabwe as telecoms position themselves to explore mobile money transfer platforms as a supplementary revenue stream. Telecoms and banks are advertising the benefits of their products on a daily basis in local newspapers.

The volatile economic environment which has prevailed in Zimbabwe over the past decade largely contributed to the failure by telecoms and banking institutions to adopt mobile banking in spite of its power to reach far more people.

In East Africa, Kenya in particular, mobile money services have had a transformative effect especially to the unbanked low-income earners, who had been traditionally ignored by commercial banks. M-Pesa is regarded as a mobile money success story, and time will tell whether mobile will pick up in similar fashion in Zimbabwe.

The story so far is that in recent months, there has been a foray by telecommunication and banking institutions to establish mobile banking platforms. Examples of mobile banking products that have been launched include, Kingdom Bank’s Cellcard, Tetrad’s eMali, Econet Wireless’ EcoCash; CABS Bank’s Textacash, Interfin Bank’s Cybercash and CBZ Bank’s Mobile Banking among others.

CABS Bank’s Textacash and Interfin Bank’s Cybercash, which operate on Telecel Zimbabwe’s mobile money transfer platform. The system allows for transfer, receipt, depositing, withdrawal, inter- and intra-bank cash transfers among institutions connected to the ZimSwitch network. This has brought convenience and faster realtime transacting.

Expectations are high that mobile money will open up financial sector services to millions of unbanked Zimbabweans, particularly in the rural areas.

“The adoption of mobile technology is viral and the use of mobile banking services will quickly spread,” said Palmer Mugavha, Marketing Manager of Interfin Bank.

Undoubtedly, the rapid spread of mobile phone penetration, as opposed to bank outreach, has created a fertile ground for mobile money to grow in Zimbabwe. Mobile banking could be the platform for rapid financial inclusion of people in remote and rural areas that now only need mobile phones to access a certain range of essential financial services they never used to get.

“Mobile banking is largely a win for the customer than the bank. Banks traditionally had expensive distribution channels established in anticipation huge volumes of people would go there to transact,” said Tawanda Nyambirai TN Financial Holdings chief executive.

For people living in the rural areas, there will no longer be a need to travel to the city to withdraw money. Once they received a SMS confirmation that money has been deposited into their virtual account,they can visit the nearest farmer, supermarket, post office or non-governmental organisation that is in partnership with a bank or mobile company to collect their cash.

According to Econet, Zimbabwe’s leading mobile operator with more than 5 million subscribers, 500 Eco-cash agents will be deployed throughout the country. The company has also established partnerships with 200 post offices and 300 independent agents.

“You will not find a bank at every corner of the country, but, thanks to the extensive coverage we have built over recent years, mobile phone access has spread to virtually every corner of the country. Sending and receiving cash will now no longer take days, it can now be achieved virtually instantly,” said Douglas Mboweni, CEO

However, there is concern that EcoCash’s transaction fee are higher than normal bank charges, and this may hinder many people from utilising the mobile banking platform. According to a report in a local business weekly newspaper, the high charges may be stemming from the cost of going solo where the mobile phone operator incurs high IT infrastructure costs to set up the whole platform.

The costs of transacting is expected to go down as competition increases around the provision of mobile banking services. Besides transaction cots, security of the mobile money transactions platforms is any issue that telecoms and banks will have to grapple with. According to analysts, mobile payments fraud may include identity theft, stolen PIN codes, account information hacking, money theft, money laundering and subscription fraud, amongst others.

Overall, a mobile money literacy program will need to be rolled out to ensure the success of the innovation.

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