Harare,(New Ziana) – The Reserve Bank of Zimbabwe (RBZ) on Monday banned licensed mobile money agents and merchants from taking cash deposits and offering withdrawals, commonly referred to as cash-in, cash-out services, the latest arsenal the central bank is throwing at the thriving parallel currency market.
Until now, all agents and merchants licensed under mobile money platforms such as Econet Zimbabwe’s Ecocash, Net One’s One money and Telecel Zimbabwe’s Telecash were allowed to take cash deposits and offer withdrawals to customers.
But since the economy started experiencing physical cash shortages a few years ago, the agents, especially those under Ecocash – which enjoys a lion’s share of the market – have over time engaged in the business of selling physical cash at premium rates of as high as 53 percent to desperate customers.
This fueled the black currency market further, to an extent physical cash is more readily found on the streets than in banks.
To address this, the central bank said in a statement on Monday, cash-in and cash-out services were banned with immediate effect.
“The charging of commission outside the approved framework adversely
affects the smooth operation of payment systems and have the negative
effect of distorting pricing of goods and services,” said central bank’s deputy director Financial Markets, National Payments Systems, Josephat Mutepfa.
“In view of all the above, all mobile payment system providers and
merchants are hereby directed to discontinue cash-in and cash-out with
immediate effect.”
The RBZ added: “Furthermore, all economic agents are with immediate
effect, directed to discontinue cash back facilities.”
Cash back facilities are normally offered in places retail outlets like supermarkets were buyers ask to be given bank notes as change after making purchases.
The illegal cash selling had overtime contributed to the loss of value
of the local currency, the Zimbabwean dollar against major foreign currencies especially the United States dollar and the South African Rand.
While cashing-out attracted a premium of up to 53 percent of the amount
being withdrawn, agents were also selling local currency notes at a rate of USD$1 for ZWL$110.
Ecocash was launched a few years ago, and became hugely successful as
it was seen as providing a bridge to addressing cash shortages in the
economy.
But overtime, agents seem to have lost focus as they sought to make a
killing from customers desperate for cash for small day-to-day transactions.
Two weeks ago, Econet Zimbabwe’s major shareholders, Strive Masiyiwa
said cash shortages were the problem and not Ecocash, as it was simply
a vehicle to facilitate transactions.
“You do not dig up a road, simply because a thief came on a road.Ecocash is just a road for money, it is not the money,” he said.
The jury is still out on whether the latest Reserve Bank ban will be
effective as the market has previously devised ways to circumvent such
embargoes.
Already, social media is pointing out that the central bank is treating a symptom and not the source of the problem.
New Ziana
