Retailers and other business entities may have lost potential revenue running into hundreds of millions of dollars after Zimbabwe’s biggest mobile money platform, EcoCash, remained largely out of service yesterday due to a major systems upgrade, which began on Friday night.
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According to the Postal and Telecommunications Regulatory Authority (Potraz), the EcoCash mobile money platform accounts for roughly 99 percent of the total mobile money transfer services that take place in Zimbabwe. The remainder is handled by NetOne and Telecel platforms.
A snap survey conducted by The Herald Finance and Business indicated that activity was significantly subdued in most retail outlets and in all commercial transactions, such as paying for fuel at service stations, as they also largely depend on the mobile money payment platform which remains down after missing the scheduled upgrade period publicized last week.
EcoCash, a mobile payment platform operated by Econet Wireless sister company Cassava Smartech, is the second biggest payment system after swipe cards in value terms but accounts for the bulk of transactions by volume.
The situation is made worse by the fact that Zimbabwe is experiencing an acute shortage of cash across the entire economy and anyone who requires notes or coins has had to pay premiums of up to 50 percent on their RTGS dollars.
As such, yesterday there were very few transactions for mostly small items across the major supermarkets like Pick ‘n Pay, OK Zimbabwe and Food World while short queues could be seen where swipe cards were being used for the visibly limited payments that occurred in the shops.
TM Pick ‘n Pay Jason Moyo Avenue had very few customers who were paying using swipe cards, while a handful used cash to buy only few items, mostly of small value.
Customers said they were facing serious challenges buying anything, as they did not have the cash to make payments while others claimed they were not formally employed and had therefore not bothered to acquire bank cards.
“We can’t transfer money in our bank accounts from EcoCash because (the system) is currently down,” said a customer who spoke to this publication at Pick ‘n Pay Supermarket along Jason Moyo.
At OK First Street there was only a small number of customers who were buying using either cash or ATM cards with a large number of customers without either cash or swipe cards looking dejected and upset.
A manager at Food World, who requested not to be named, said while the EcoCash upgrade had negatively affected sales; it was a blessing in disguise as it had briefly reduced the demand for cash and possibly premiums charged on desperate cash seekers.
Confederation of Zimbabwe Retailers’ president Denford Mutashu confirmed the situation when he said; “We went around the capital and realized that most shops are not transacting.
“Transactions are almost grounded and like we always say, it’s dangerous to have companies with a monopolistic dominance in the economy.
“I think as a country, we should be seen to be promoting competition in every facet of the economy so that consumers and the citizenry are not affected at every turn of an upgrade or technical glitch by a single operator.”
Efforts to contact EcoCash general manager Natalie Jabangwe and Econet Wireless Zimbabwe media relations and analytics executive Fungayi Mandiveyi, were futile as their cellphones went unanswered.
Since inception, EcoCash has grown to become the de facto national payments platform as it now handles over 85 percent of all electronic transaction by volume, according to the Reserve Bank of Zimbabwe (RBZ).
The system moves billions of dollars worth of transaction value, including the purchase of goods and services, payment of bills — including payment of utility bills — sending of money from person to person, and the movement of funds to and from one’s bank account, among so many uses of the service.
The EcoCash platform is estimated to have over 10 million registered customers, and about 180 000 merchants and agents.
The platform has become central to doing business — for both individuals, companies and Government departments, and is at the core of the national financial inclusion strategy as espoused by the Central Bank.
The recently appointed Monetary Policy Committee at the Central Bank, in its inaugural Press briefing and statement presented in late October, noted: “with satisfaction the fact that the domestic economy in 2019 achieved new heights in terms of the utilization of electronic systems for market transactions”.
The EcoCash upgrade, the second within months, comes when the National Financial Inclusion Strategy, spearheaded by the Reserve Bank of Zimbabwe, is targeting to increase the overall level of access to formal financial services in the country from 69 percent (in 2014) to at least 90 percent by 2020.
The plan also aims to increase the proportion of banked adults in the country to at least 60 percent by 2020.