Monday, 18 November 2019

PAYNET LOSES US$100M LAWSUIT AGAINST BANKS


PAYNET Zimbabwe (Pvt) Ltd, a subsidiary of Mauritius registered firm, Payserv Africa Limited, has lost a US$100 million lawsuit against the Bankers Association of Zimbabwe (BAZ) following a dispute over the use of the company’s software to process payments.

BAZ, represented by Thabani Mpofu, won the case with costs against Paynet at the High Court after Justice Edith Mushore upheld an exception by BAZ.

Paynet Zimbabwe, a wholly-owned subsidiary of Cambria Africa — a foreign entity and technology owner of a bulk payment platform commonly known as Paynet, wanted BAZ to pay US$100 million for allegedly influencing and urging local banks not to pay for transaction fees.
Paynet, a transaction switch that was used by virtually all banks, was suspended because of a US$470 000 debt in June.

Paynet Zimbabwe said it entered into separate contracts with BAZ members in which the contracted financial institutions would access the platform on an agreed per transaction fee and pay in hard currency.

Paynet Zimbabwe said in April this year it wrote to all the financial institutions informing them that as of their May 30, 2019 invoice, Payserv Africa would invoice and collect the agreed prevailing licence fees and that invoices would be paid in United States Dollars.

The firm said in acknowledging receipt of the correspondence, a number of the contracted financial institutions indicated in writing that they accepted the invoices and were indebted to pay.

“Notwithstanding the foregoing, defendant (BAZ) engaged in anti-competitive practices, actively preventing its members from free and constructive engagement with the plaintiffs (Paynet Zimbabwe and Payserv Africa). The defendant was effectively instructing its members to breach their respective contracts and existing arrangements with the plaintiff,” Paynet Zimbabwe and Payserv Africa said.

The firms further said BAZ’s actions resulted in all the financial institutions not proceeding to make payment arrangements to fulfil the requirements communicated by Payserv Africa, despite the undertaking of the Reserve Bank of Zimbabwe governor, John Mangudya.

The firms further said BAZ’s actions were clearly calculated to eliminate the Paynet platform as a service provider to all its members, regardless of the particular financial institution’s intentions, preference, or competitive interest.

“Plaintiffs deem the defendant’s conduct to be deliberately anticompetitive and destructive to the conduct and profitability of its business and its ability to freely and individually contract and negotiate directly with the members of the defendant…plaintiffs calculate that the adverse impact of the defendant’s actions stands at US$100 000 000,” the firms said.
The court ruled in favour of BAZ. Newsday

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