People using the mobile ZIPIT platform to make near instant
payments have been limited to a total of $20 000 a day and $100 000 a month in
efforts to stop large transactions on the foreign exchange black market, but
continue to allow the normal transactions ZIPIT was designed to facilitate.
Until banks received the latest directive from the Reserve
Bank of Zimbabwe’s Financial Intelligence Unit’s (FIU), transaction limits were
$100 000 a day and $3 million a month.
Unlike swipe machines and RTGS transactions, where it is
easy to see whose accounts are being debited and credited, the FIU has found it
hard to identify these in ZIPIT transactions speedily or to figure out if any
of the parties have multiple bank accounts. The spike in ZIPIT transactions
follows tighter limits placed on the mobile money systems, which also allow the
originator and receiver of payments to be hidden from swift inspection.
In a letter yesterday, the FIU told Zimswitch Technologies,
the company facilitating ZIPIT, to cap transactions until better safeguards
were built into the system to minimise the risk of money laundering.
“The FIU has noted that the existing ZIPIT transaction
limits, which have no monthly cap, are being misused, primarily for illicit
foreign currency transactions,” the letter read.
Authorities have been closely monitoring the banking
sector, a process that showed ZIPIT’s flaws.
“The FIU has noted shortcomings in the ZIPIT system that
make it difficult for banks, regulators and law enforcement agencies to
speedily identify counter-parties to a transaction, or to identify multi-banked
users.
“Until such time when safeguards are built into the ZIPIT
system to minimise money laundering risk, Zimswitch is directed to implement
with immediate effect, daily and monthly ZIPIT limits of $20 000 and $100 000,”
the FIU wrote.
Authorities are arguing that those who intend to move large
amounts of money should use the conventional RTGS system to make payments, as
these are equally traceable.
Explaining the rationale behind the decision, RBZ Governor
Dr John Mangudya said forex dealers who were derailed by the suspension of
mobile money agents were now exploiting ZIPIT.
“The FIU had noticed that after freezing of mobile money
agent accounts, ZIPIT became the alternative channel for illegal forex
dealers,” Dr Mangudya said.
ZIPIT’s ease of access, which in normal circumstances is
seen as a strength, had become the Achilles heel in the country’s fight against
currency manipulators.
“If you look at the architecture of the platform, it does
not require details necessary to closely monitor transactions. By giving the
directive, the FIU are trying to minimise the adverse impact of shadow
transactions,” the Governor said.
Dr Mangudya said the intended outcome of all RBZ recent
interventions was to tame the forex black market. The hosting company immediately complied with the
instruction.
In a letter to banks, Zimswitch chief executive Mr Cyril
Nyatsanza informed banks of the new limit.
“We advise that the FIU has issued a directive for
Zimswitch to immediately reduce ZIPIT transactions limit to a maximum of $100
000 per month,” the company told banks.
Banks were expected to immediately effect the adjustments. Bankers Association of Zimbabwe could not be reached for
comment.
Zimbabwe has about 4 million active bank accounts and the
directive is set to affect only 3 000 accounts, which have been observed to be
moving large amounts of money.
Most people using ZIPIT to pay bills or buy goods from
shops where there is no swipe machine are unlikely to be affected by the new
limits. Most company transactions of any size invariably go through the RTGS
platform since the companies themselves want better records for their own audit
purposes. Herald
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