Zimbabwe: Mobile-Based Transactions Rise

THE value of cash transactions by mobile telecommunications networks increased to US$709,2 million during the month of July, from US$639 million in June, as the continued liquidity shortages in Zimbabwe pushed consumers to electronic payment platforms, a central bank report has indicated.

Banks have run out of United States dollar notes, and most companies, which used to be a source of hard cash for their workers, are struggling to access hard cash.

This has meant that across the economy, payments are being made through electronic transactions, which the central bank has been promoting as part of measures to prevent an economic implosion.

Leading mobile based transacting platforms include Ecocash, which is operated by mobile phone network, Econet Wireless Zimbabwe, NetOne's One Wallet, GetCash, which is operated by GetBucks and Telecash, a unit of Telecel Zimbabwe.

In its monthly economic review covering the month of July released recently, the central bank said there was also a rise in the use of card based transactions during the period.

The July monthly economic review released at the end of last month is the latest in the series, which covers a wide range of economic activities.

Another platform that has been used in place of hard cash is the Real Time Gross Settlement (RTGS) system, which allows depositors to transfer money between banks.

This reflects how the switch from hard cash had created opportunities for other sectors, such as the mobile based service providers.

"Mobile and internet based transaction values rose from US$639,19 million as at end June 2016, to close the month of July 2016 at US$709,26 million," the report said.

"Card based transactions stood at US$406,35 million as at the end of July 2016, up from US$335,40 million in June 2016. Transactions processed through the national payment system recorded a nine percent decline, during the month of July 2016. Cash transactions decreased by two percent to US$530,60 million in July 2016, from US$543,94 million in June 2016," the report said.

Analysts see the use of hard cash in transactions continuing to fall as people hold on to their cash ahead of new monetary measures expected in November.

Next month, the central bank will introduce bond notes to fund a five percent incentive for exporters and increase liquidity in the economy.

Economic analyst, Kingstone Kanyile, said the use of hard cash was declining in Zimbabwe and this was spurring growth in electronic transactions.

"Cash shortages have accelerated the use of electronic transactions," Kanyile said.

"This is creating opportunities for alternatives, which is mobile. Zimbabwe is moving away from hard cash transactions," he said.

SOURCE:FINANCIAL GAZETTE