People using the mobile ZIPIT platform to make near instant payments have been limited to a total of $20 000 a day and $100 000 a month in efforts to stop large transactions on the foreign exchange black market, but continue to allow the normal transactions ZIPIT was designed to facilitate.
Until banks received the latest directive from the Reserve Bank of Zimbabwe's Financial Intelligence Unit's (FIU), transaction limits were $100 000 a day and $3 million a month.
Unlike swipe machines and RTGS transactions, where it is easy to see whose accounts are being debited and credited, the FIU has found it hard to identify these in ZIPIT transactions speedily or to figure out if any of the parties have multiple bank accounts. The spike in ZIPIT transactions follows tighter limits placed on the mobile money systems, which also allow the originator and receiver of payments to be hidden from swift inspection.
In a letter yesterday, the FIU told Zimswitch Technologies, the company facilitating ZIPIT, to cap transactions until better safeguards were built into the system to minimise the risk of money laundering.
"The FIU has noted that the existing ZIPIT transaction limits, which have no monthly cap, are being misused, primarily for illicit foreign currency transactions," the letter read.
Authorities have been closely monitoring the banking sector, a process that showed ZIPIT's flaws.
"The FIU has noted shortcomings in the ZIPIT system that make it difficult for banks, regulators and law enforcement agencies to speedily identify counter-parties to a transaction, or to identify multi-banked users.
"Until such time when safeguards are built into the ZIPIT system to minimise money laundering risk, Zimswitch is directed to implement with immediate effect, daily and monthly ZIPIT limits of $20 000 and $100 000," the FIU wrote.
Authorities are arguing that those who intend to move large amounts of money should use the conventional RTGS system to make payments, as these are equally traceable.
Explaining the rationale behind the decision, RBZ Governor Dr John Mangudya said forex dealers who were derailed by the suspension of mobile money agents were now exploiting ZIPIT.
"The FIU had noticed that after freezing of mobile money agent accounts, ZIPIT became the alternative channel for illegal forex dealers," Dr Mangudya said.
ZIPIT's ease of access, which in normal circumstances is seen as a strength, had become the Achilles heel in the country's fight against currency manipulators.
"If you look at the architecture of the platform, it does not require details necessary to closely monitor transactions. By giving the directive, the FIU are trying to minimise the adverse impact of shadow transactions," the Governor said.
Dr Mangudya said the intended outcome of all RBZ recent interventions was to tame the forex black market.
The hosting company immediately complied with the instruction.
In a letter to banks, Zimswitch chief executive Mr Cyril Nyatsanza informed banks of the new limit.
"We advise that the FIU has issued a directive for Zimswitch to immediately reduce ZIPIT transactions limit to a maximum of $100 000 per month," the company told banks.
Banks were expected to immediately effect the adjustments.
Bankers Association of Zimbabwe could not be reached for comment.
Zimbabwe has about 4 million active bank accounts and the directive is set to affect only 3 000 accounts, which have been observed to be moving large amounts of money.
Most people using ZIPIT to pay bills or buy goods from shops where there is no swipe machine are unlikely to be affected by the new limits. Most company transactions of any size invariably go through the RTGS platform since the companies themselves want better records for their own audit purposes.