Econet’s Mobile Money service,EcoCash, today announced a landmark agreement with MasterCard that will significantly assist in reducing cash dependence and increase financial inclusion through the provision of electronic payments in Zimbabwe.
The collaboration will result in more than three million MasterCard debit cards being issued to mobile money provider EcoCash’s customers in the next five years. This is the first time that physical MasterCard debit cards are available to people using mobile money services in Africa, and is the largest rollout of secure EMV Chip and PIN payment cards in Zimbabwe to date.
“The adoption of electronic payments is critical to Zimbabwe’s economic development. Reducing dependency on cash while increasing financial inclusion benefits the whole country including the government, industry sectors like tourism and retail, merchants and citizens,” says Douglas Mboweni, CEO of Econet.
Today, 40% of Zimbabweans are financially excluded and another 22% rely on informal financial products or services. Through its mobile money products, EcoCash has successfully provided a means for unbanked and under-banked citizens to participate in the formal economy and has reduced the demand placed on banks for scarce and costly currency.
For the first time, EcoCash customers will be able make use of their EcoCash funds in ways previously closed to them. By obtaining an EcoCash MasterCard debit card, EcoCash customers will be able to withdraw money from MasterCard-licensed ATMs and pay for goods and services at millions of merchants that accept MasterCard payment cards, both in Zimbabwe and internationally.
“The integration of these products and services are particularly exciting for EcoCash customers,” says EcoCash CEO Cuthbert Tembedza. “We look forward to offering Zimbabweans even more ways to benefit from the security and convenience of electronic payments as they engage with, and contribute to, the formal economy.”
Today, over 85% of retail payments globally are still carried out using cash or cheque, with the percentage being much higher in Africa. As a payment option, cash takes time to get at, is riskier to carry, and cash costs society as much as 1.5% of GDP, depending on the country. It is for these reasons that governments are rapidly driving the conversion from cash to electronic payments as they realise the benefits of a cashless society, namely increased transparency, cost effectiveness, financial inclusion, foreign investment and economic growth.
“The EcoCash MasterCard debit card is a milestone towards realising MasterCard’s vision of a cashless society,” says Charlton Goredema, Vice President and Area Business Head, Southern Africa, MasterCard. “Demonstrating the value of close collaboration in the financial services and payments technology industries, EcoCash and MasterCard have devised an innovative payment product that addresses Zimbabwe’s market realities, particularly by acknowledging the impact mobile money has on the country’s economy.”
“As EcoCash enables its customers to benefit from MasterCard’s global payments network, we are assisting Zimbabwe to integrate its economy with those elsewhere in the world. Importantly, we are also contributing to the financial freedom of individuals,” says Goredema.