Monday 29 June 2020

WE HAVE COMPLIED : MOBILE MONEY OPERATORS


Mobile money operators have heeded the Reserve Bank of Zimbabwe (RBZ) directive to suspend agent lines and convert merchant lines into one-way channels, allowing payments to come in while cashing out is to be made through a bank, to stop large sums being fed anonymously into the black market.

The development followed a statement by Government last Friday suspending mobile money platforms, to deal with “malpractices, criminality and economic sabotage” perpetuated by some mobile money operators.

On Saturday, the RBZ said genuine individual transactions would be processed normally, that is those by holders of ordinary lines, while merchant lines would become one way, allowing incoming transactions, but merchants would then be required to move their money to their bank accounts to make almost all payments from the bank accounts rather than from their mobile wallets. However, agent lines were all suspended.

The Herald gathered last night that all mobile money operators had complied with the RBZ directive.

Cassava Smartech group media and corporate communications executive, Mr Fungai Mandivheyi, declined to comment on the issue. However, a well-placed source confirmed that EcoCash had complied with the directive.

“Yes, I can confirm that we have complied with the RBZ directive. I must emphasise that EcoCash is a law-abiding company and we didn’t have problems in following the directive,” said the source. A NetOne spokesperson said: “NetOne has complied with the guidelines set by the RBZ.”

It could not be immediately established how many agent lines had been suspended, but EcoCash, the largest player in the mobile money sector by the number of subscribers and transactions is understood to have just over 501 000 agent and merchant lines as at June 10, 2020.

The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) 2020 first quarter telecommunications sector report shows that EcoCash processed 98.31 percent transactions compared to 1.66 percent for OneMoney and 0.04 percent for Telecash.

Economist Mr Langton Mabhanga, who is a board member of the Pan-African Chamber of Commerce, told The Herald last night that the compliance by mobile money operators was                                  welcome.

“In instances where some agent and merchant accounts were conduits for high volume forex trading, the move by RBZ to suspend them may curtail the escalation of the exchange rate and reports that the concerned companies have complied are welcome and once implemented, can potentially slow down the currency spike and reassert the importance of production and inclusive development,” said Mr Mabhanga.

Zimbabwe National Chamber of Commerce chief executive Mr Takunda Mugaga weighed in, saying: “It means there are no significant transactions that can happen on the EcoCash platform as merchants and agents are required to accept and disburse e-money in the same way deposits and withdrawals take place in a bank.”
Economist Mr Persistence Gwanyanya said following the challenges associated with mobile money in the last few weeks, there is need to revisit the mobile-based money architecture with a view to understanding the risk of monetary expansion from mobile money agents, which could be a source of currency instability.

“The suspicion currently is that mobile money based transfer operators could be contributing to monetary expansion through participating in a credit creation process through their agents, making it very difficult to manage money supply growth and therefore currency stability and inflation,” he  said.

Mr Gwanyanya said this makes it difficult for the RBZ to manage internally created money supply, which impacts negatively on the efficacy of the monetary policy to stabilise both the local currency and inflation. Herald

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