The daily individual limit of $5 000 for mobile money
transactions will cover the vast majority of ordinary payments by citizens, but
help to contain illegal dealings that fuel black market foreign currency
exchange rates and consequently push up prices of goods and services.
EcoCash, the dominant mobile money platform, announced on
Wednesday that it was implementing the daily limit of $5 000 imposed by the
Reserve Bank of Zimbabwe (RBZ).
RBZ Governor Dr John Mangudya directed in the Mid-Term
Monetary Policy Review statement recently that as part of measures to entrench
price and exchange rate stability, that individuals were limited to daily
transactions totalling $5 000 a day, that the temporary suspension of agent
lines was being made permanent, and that merchants could still receive
unlimited payments from customers into their merchant lines, but, as has been
the case since June, had to transfer this money to their bank accounts to spend
it.
Economist and member of the Monetary Policy Committee Mr
Eddie Cross told The Herald through e-mailed responses that the transaction cap
will not affect business operations.
“In the past 12 months, EcoCash handled 1 938 billion
transactions worth $225 billion dollars — an average transaction of $116. This
means that the limit of $5 000 should cover the great majority of
transactions,” said Mr Cross.
“Once the situation settles down, this limit can be
reviewed, but the authorities had to limit the capacity of the system to
transact in buying foreign exchange. This they were doing through their agents
funded by cash transferred to them by their bulk payers system. This affected only
200 or so clients and was being abused. While the measures taken will affect
their agents, their clients should not be disadvantaged to any extent.”
Pan African Chamber of Commerce board member Mr Langton
Mabhanga said curtailing EcoCash and other mobile money transfer limits will
bring “sobriety to the financial system”.
“Illicit and errant transactions and money laundering are
likely to be pacified by the new policy. Price skimming, advance pricing and
overrating or underrating of mainstream currency that gave rise to inflationary
pressures that were associated with the mobile money transfer activities, might
have just been withered by the new raft of regulations.
“One door shuts, another one opens! The financial sector
now calls for proliferation of sane and compliant plastic money monitored
platforms strictly via a regulated national electronic funds switch such as
ZimSwitch,” he said.
The measures by the RBZ followed a forensic audit to assess
the integrity, compliance and efficacy of mobile money platforms and
transactions in Zimbabwe, which revealed significant weaknesses in the systems
of the mobile payment operators, namely EcoCash, OneMoney, Telecash and Mycash.
The RBZ uncovered a number of deficiencies including
non-adherence to Know-Your-Customer principles characterised by, among other
issues, creation of mobile money accounts using fictitious and unverified
identification particulars; and the creation of money on the platforms through
overdrafts and fraudulent or fictitious credits that were not backed by
balances in the mobile money trust accounts.
Since the last monetary policy statement in February 2020,
the RBZ, through the Monetary Policy Committee implemented a number of measures
aimed at ensuring exchange rate, price and financial stability in the economy,
while supporting real economic activity.
In particular, the RBZ introduced the foreign exchange
auction system in response to the volatility in the pricing of goods and
services due to the rising parallel exchange rate premium. The subsequent
introduction of the auction system for SMEs, running concurrently with the main
auction, will further support current efforts to improve the management of
foreign exchange in the economy through genuine and unmanipulated market
forces. Herald
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