Mobile money transactions up to $11bn

Mobile money transactions up to $11bn
The Reserve Bank of Zimbabwe.

The Reserve Bank of Zimbabwe.

ZIMBABWE’S mobile money transactions have jumped to $11 billion in the nine months to September this year, from $6,79 billion in the same period last year, as the country embraces mobile money amid a debilitating bank note crisis.
Reserve Bank of Zimbabwe deputy governor Jesimen Chipika said mobile financial services have grown tremendously in the last seven years to the extent that they have overtaken traditional methods of transacting.
“For the nine months ending September 30, 2017, 485 million transactions valued at $11 billion were processed on the mobile platforms, representing an increase of 89 percent and 62 percent, respectively, from 2016,” she said while addressing delegates at the International Association of Deposit Protection Insurers Africa Regional Committee meeting in Victoria Falls.
To promote a cash-lite society, Chipika said, the central bank has allowed partnership arrangements between mobile payment service providers and deposit-taking financial institutions in line with the National Payment Systems Act.
“Resultantly, banks are able to offer mobile payment services to the transacting public. Zimbabwe adopted a bank-led model in order to facilitate oversight of deposit-taking activities,” she added.
This comes as various stakeholders have agreed that mobile money has become a popular and convenient methodof paying for goods and services amidst cash shortages.
“The introduction of bank to mobile wallet transfers has also contributed to the growth in mobile money transactions,” the Postal and Regulatory Authority of Zimbabwe (POTRAZ) said in its latest industry report.
According to the telecommunications sector regulator, all mobile operators experienced an increase in active mobile money subscriptions in the first half of the year with the highest increase registered on One Wallet, which has since been rebranded to OneMoney. By the end of June this year, Zimbabwe had over 3 362 476 active mobile money subscriptions  hooked on EcoCash, Telecash and OneMoney  compared to 3 221 059 subscribers in the same period last year.
A recent report by consulting firm, Studio D Radiodurans, revealed that the surge in mobile money adoption has stimulated competition between banks and mobile money providers
“Zimbabwe is one of the few countries where banking penetration has declined, while mobile money adoption has increased,” reads part of the report, titled Mobile Money Practices in Zimbabwe, which was commissioned bythe Bill and Melinda Gates Foundation. Based on recent experience, Zimbabwe has a relatively low-trust environment. Mobile money offers a higher-trust option than traditional financial services,” the report added.
Zimbabwe is grappling with cash shortages that have worsened in the last six months, with some banks unable to provide money at all to customers. A shortage of United States dollars has left businesses struggling to import goods and the raw materials to make products locally.Prices of imported cooking oil and dairy and other basic products have risen. Businesses say they are buying foreign currency on the black market at a premium, raising fears of a return to hyperinflation.
Former finance minister Patrick Chinamasa said cash shortages stemmed from a lack of confidence in the financial system, a mismatch between cash dollars and bank balances, poor cash circulation and what he called “lack of discipline and rent seeking behaviour”.
“As one of the fastest-growing sectors in Zimbabwe, mobile money could be a step towards the formalisation of the informal economy by delivering revenue to a fiscally constrained government. It also delivers a data trail that has hitherto been off the books, and which may be exploited by the government in the future,” the Studio D Radiodurans report said.
On why the trends were showing the 70 percent unbanked adult population moving to mobile money, interviewees cited a number of reasons such as low trust in banks post-hyperinflation, a large section of Diasporans sending money home, minimal regulation of mobile money and no fee to maintain account. Others include a higher perception of people who see the platform as an alternate saving mechanism to banks, better networking, and the interoperability, which allows transfers across mobile money, and services and banking products.

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