The device has become handy in facilitating transactions
involving large sums of money, essentially “formalising” the illegal activity
as street forex money changing is now formally linked to official banking
systems.
Across several streets of Bulawayo, a horde of street money
changers are a regular feature while carrying or waving POS machines visibly
showing logos of various financial institutions to lure their clients.
While most illegal money changes operate from cars in areas
surrounding Tredgold Building, several others have set up permanent spots where
they do their trade in the open.
Former Governor of the Reserve Bank of Zimbabwe (RBZ)
Gideon Gono once described the area around Tredgold Building as the World Bank
of Bulawayo’s illegal money-changing business.
So brave are the illegal money changers that they conduct
their business right in front of the Magistrates’ Courts and would be unmoved
even when police officers pass by.
At one point, this raised the ire of Chief Justice Luke
Malaba who questioned why money changers were being allowed to disrespect the
courts by doing illegal business near the Tredgold Building.
Some are found along Leopold Takawira Avenue between Fort
Street and Joshua Mqabuko Nkomo Street while others have drifted to George
Silundika Street between 10th and 11th Avenue.
These are popular with members of the public who prefer the
higher rates offered as opposed to the official rate in the formal market.
Armed with POS machines, the illegal money changers are now able to circumvent
bank transfer or EcoCash limits set out by the Reserve Bank of Zimbabwe (RBZ)
and are making a “killing” out of it.
In Bulawayo as of yesterday, the black market rate was at
US$1: Z$3 200 while the official rate trailed behind at US$1: Z$1
400. The police are not taking action and this seems to have emboldened
the resolve by the illegal money changers to continue their activities, which
they have fine-tuned.
The RBZ has been pushing for the use of electronic payment
systems and plastic money to drive financial inclusion and for an eventual
drive towards a cashless economy. However, the increasing use of POS machines
at every point of operations by illegal money changers has prompted this
publication to investigate how the swipe machines end up in the streets.
Our news crew sought to establish how POS machines are
obtained from financial institutions and their conditions of usage as per the
agreements signed. Posing as an entrepreneur at one of Zimbabwe Stock
Exchange-listed financial houses, one official outlined to the reporter the
process of obtaining a POS machine.
“First of all, you need to open a company bank account with
us, providing the bank with your certificate of incorporation, CR14, CR6, a tax
clearance certificate, memorandum and articles of association,” said the
official.
“We need to have sight of your minutes of the previous
meeting, copy of identity documents, company profile and a deposit of $18 000.
The whole process takes less than a week and we will issue you with POS
machines depending on the number you require,” said the bank official who was
generous enough to provide his contact details “for further assistance”.
However, a document provided, which relates to the POS
merchant agreement details the usage of the gadgets and measures to be taken
for violating the agreement. For instance, the document states that: “the
equipment will be delivered by (name of the Bank supplied) to the delivery
address.
“Bank at its own cost, provides telecommunication equipment
to link the equipment to the merchant. The Merchant shall not remove the
Equipment from the delivery address or relocate it anywhere else without the
prior written approval of the Bank,” reads one section.
On the part of the merchant, the document states that: “the
Merchant will always keep the equipment fully charged, where applicable and in
a safe place at the delivery address and ensure that it is used with due skill
and care, and only in the manner and for the purpose for which it is designed
and intended in accordance with the business of the merchant.
“The merchant shall ensure that the equipment is always
operated in accordance with the law . . . where the equipment is used to commit
fraud or bank reasonably suspects the existence of fraud or nefarious conduct
in respect of the provisions of this agreement, Bank may terminate this
agreement without giving the Merchant any notice and will be entitled to
recover the equipment immediately.”
Ironically, the publication spotted several POS machines in
possession of osiphatheleni, an observation that dovetails with long-standing
Government view that some businesspeople are fuelling the black market
During investigations, Chronicle established that some
retail outlets were reportedly hiring out their gadgets to money changers for a
fee while some are directly engaging osiphatheleni to conduct illegal forex
trading on their behalf.
An illegal money changer who spoke on condition of
anonymity said he got the gadget from a businesswoman who operates a boutique
in the central business district.
“I have been using POS since February this year and it’s
effective. But I cannot disclose the name of my boss or her companies. If I do
that, I will be exposing her. My task is to just swipe,” said the male money
changer.
Confederation of Zimbabwe Retailers president Mr Denford
Mutashu indicated that although they are not officially aware of the practice,
he called law enforcement authorities to step in.
“We have not received such heinous irregularities. However,
we urge the law enforcement authorities to step in and restore sanity.
Businesses should act within the confines of the country’s laws,” he said.
“Wantonly breaking the monetary regulations come with huge
costs and irreparable damage to business brands.”
Bankers Association of Zimbabwe (BAZ) chief executive, Mr
Fanwell Mutogo, said they are not aware of the practice and could only say: “we
just urge you to do more investigations before you conclude”.
A former Bulawayo-based banker said the rampant practice
“breeds money laundering and other illicit flows of money”.
“To begin with, the parallel market is illegal. That
practice is illegal and must not be encouraged at all as it breeds money
laundering and other illicit flows of money,” said the banker. Chronicle
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