Zimbabwe: Cash shortages drive mobile money usage
The use of plastic money is one of government’s solutions to address the current cash shortages in the country.
The cash shortages have seen most people resorting to the use of plastic money, by using point of sale (POS) and mobile money platforms such as Econet’s EcoCash, Telecel’s Telecash, NetOne’s One Wallet and GetCash as means of transacting.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) first quarter report, there were 3,2 million active mobile money subscribers.
Out of the 3 199 568 mobile money subscribers, Econet had 3 121 683 active subscribers, Telecel had 64 905 and NetOne had 12 980.
The Potraz report showed that Econet had the lion’s share of the market at 97,5%.
In the period under review, mobile money transactions for cash-in handled $449,8 million, cash-out transactions $407,3 million and cross network transactions reached $1,5 million.
The difference between the cash-in transactions and the summation of cash-out transactions and cross network transfers implies that about $40 million was used for other transactions such as merchant payments, bill payments and airtime top-up amongst others.
Lovemore Nyatsine, executive assistant to Econet’s group chief executive officer Douglas Mboweni said EcoCash was fast becoming the premier mobile payment system as customers embraced the convenience and efficiency of the service.
Nyatsine said the growth of EcoCash was agent and demand-driven and to date had more than 26 000 agents to cater for customers across the country.
“The current cash challenges have presented an opportunity to promote a cashless society, both in formal and informal sectors. We therefore continue to invest in the appropriate technologies that lessen the reliance on cash for day-to-day transactions,” he said.
“These include POS machines and other electronic platforms. In addition, we are in aggressive partnership negotiations with local companies and retailers who also see the benefit of using EcoCash as merchants. We have zero rated merchant payments as well to ensure payments go via the merchant route. This zero rated campaign is running for 90 days,” Nyatsine said.
He however said by nature, mobile money transaction trends tended to peak during salary payment periods. Nyatsine said the company was moving away “from these hard and fast peak periods given the fact that our customers cut across the formal sectors of the economy to the informal sector”.
EcoCash is growing to be a mode of transaction for day to day business activities both in formal and informal sectors,” he said.
Questions sent to NetOne and Telecel had not been responded to at the time of going to print.
According to Potraz the total number of registered mobile money subscribers increased by 9,9% to 8,1 million as at March 31, 2016 from 7,3 million recorded in the previous quarter.
In the period under review, of the total registered subscriptions, 39,7% were active, 3,2 million subscribers had used mobile money services to send or receive money, purchase airtime or to make payments. This implied that 60,3% subscribers were inactive.