Ecocash bear brunt of RBZ ban
The ban of mobile money agent lines by the Reserve Bank of Zimbabwe saw mobile money subscriptions and value of mobile money transactions fall drastically for the third quarter to 30 September 2020.
Last year, the central bank banned mobile money agent lines and put limits to mobile money transaction values following allegations that agent lines were being used to fuel foreign currency instability.
At that time, the premium between the official exchange rate and the parallel market rate was upwards of 300 percent.
The central bank said a forensic audit carried out by the Bank to assess the integrity, compliance and efficacy of mobile money platforms and transactions in Zimbabwe had revealed significant weaknesses in the systems of the mobile payment operators, namely Ecocash, OneMoney, Telecash and Mycash.
“Agent wallets are no longer serving any legitimate purpose and were now being used primarily for illegal foreign exchange transactions. Agents’ mobile money wallets are, therefore, abolished, with immediate effect,” said RBZ Governor Dr John Mangudya in his Monetary Policy Statement delivered on the 21st of June 2020.
The impact was felt by mobile money operators as mobile money subscriptions declined by 15.2 percent to reach 6,325,666 as at 30 September, 2020.
The decline was across operators with Ecocash losing 16.5 percent of its subscribers to close the period with 5 452 148 from 6 530 000 before the ban.
One Money lost 4.3 percent to 854 320 while Telecash was the biggest loser percentage wise dropping 44.7 percent to 34 689.
According to the latest report by regulator the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), decline in active mobile money subscriptions is attributable to the banning of mobile money agent lines by the Reserve Bank of Zimbabwe.
During that period, Ecocash lost a bit of market share to One Money. Ecocash’s market share dropped to 86.2 percent from 87.5 percent while that on One Money increased to 13.5 percent from 12 percent.
According to the Potraz report, there was also an overall decline in the volume and value of mobile money transactions in the third quarter of 2020.
Cash-In and Cash-Out transactions which had contributed $5.3 billion and $779.6 million respectively in three months to June 2020 are no longer being processes due to the banning of mobile money agents.
Airtime, Bill and Merchant Payments also decreased by 21.3 percent to $12.7 billion.
“The overall decline in the volume and value of mobile money transactions may be attributable the decline in active subscriptions as well as introduction of mobile money transaction limits,” according to Potraz.-ebusinesssweekly.co.zw
