Regulatory controls constrain EcoCash: Parent firm

ECOCASH’S parent firm, Cassava Smartech Zimbabwe Limited (CSZL) said on Tuesday that performance of the mobile money platform had been hit hard by seven major regulatory directives in the past six months that have seen its contribution to the group’s revenue declining.

In the period ending August 2020, the directives also saw EcoCash transaction volumes drop to less than 800 million from over one billion for the same period last year.

The mobile money platform has also seen its share on the National Payments System slump to 19 percent from 30 percent.

“The Group continues to comply with all the regulatory directives as they are issued,” said CSZL.

“We continue reviewing our tariffs, which are approved by the regulator, maintaining a balance between inflation, business sustainability and affordability by our customers.”

Major directives that have been issued by the Reserve Bank that have hit the platform’s performance include the reduction in daily, monthly and transactional limits, suspension of agents with transactions above ZW$100 000 and requirement for their re-registration, suspension of agent to agent transactions and suspension of some Ecocash user categories and functions.

Revision of mobile money limits and the ban of use of multiple wallets announced in the past two months also affected the performance of the mobile money platform.

CSZL said despite the drop in EcoCash’s revenue contribution to the group, other units such as the Insuretech and Vaya Technologies had recorded growth while Steward Bank’s contribution had “remained fairly stable.”

“We continue to leverage on our robust business model to innovate around on-demand technology platforms thus creating customer convenience, and value creation for our shareholders,” CSZL said.

In the period, the group saw its revenues jump 443 percent to over ZWL$3,1 billion compared to the same period last year. — New Ziana.