Yesterday, the Reserve Bank of Zimbabwe sent out a statement to Mobile Payments companies prior to the one which had been released through the Secretary of Information a day before. All mobile payment platforms defied the first directive citing that they expected such an announcement directly from the regulator.
In the new statement released by the Reserve Bank of Zimbabwe, mobile payment transactions were not banned completely but there are some stringent restrictions.
“All mobile money agents are suspended from facilitating mobile financial transactions with immediate effect.”
“All merchant transactions are suspended except for receiving payments for goods and services as well as payment of utilities (water, power, and airtime), which have been limited up to ZW$5000 per day for the convenience of the transacting public”. the statement said.
EcoCash has since notified its users of the changes taking effect.
So what are the changes and how are EcoCash users affected?
Initially, the idea was suspending all mobile transactions effective immediately until these platforms facilitating transactions reform to their original purpose and all the current phantom rates of exchange have converged into a genuine rate of exchange that is determined by market forces under the Foreign Currency Auction system.
According to EcoCash, all Agent and Bulk payer lines have been suspended which directly affects Cash In and Cash-out options as these are facilitated by EcoCash Agents who use Agent Lines to conduct their business.
“A Bulk Payer is any organization (for profit/non-profit) that makes bulk transfers of money to recipients using the EcoCash platform.
Recipients use their mobile numbers as accounts to receive money. This function is ideal for payroll administration, aid distribution etc”
A suspension on the use of Bulk Payer lines also affects salary payments for people who only use EcoCash as their Banking Platform as the majority of users do not hold bank accounts. These lines were also created to facilitate companies or small businesses in the manufacturing and retailing business as they make bulk payments when purchasing raw materials or distributing salaries.
Agent lines aren’t the only part of EcoCash affected as Merchant lines have also been slapped with a few changes but not a complete suspension. Merchant to Merchant payments as well as merchant to individual transactions have also been suspended.
However, Merchant lines are used by businesses to receive payments from their customers such as in stores like Pick n Pay or small retailers when a customer buys from them. With this new directive, Merchants can now only receive customer payments and can not move money between themselves or send to an individual.
The limitations imposed on these mobile payments platforms are meant to combat the spiraling parallel market exchange rate which has affected the local currency since its introduction with the exchange rate against the $USD now standing at $1/$ZWL 57.35.
Due to these changes, cash can now only be obtained from banks legally as EcoCash Cash-Out is no longer a possible option. Moreover, mobile wallet users who used EcoCash as their sole banking platform would have to opt for a bank account if they do wish to continue transacting in the long because it is uncertain how long this suspension will last.
EcoCash users can still use their wallets for basic payments to anyone with a merchant line. That means buying electricity or airtime is still possible.