LONDON – Cambria Africa PLC said Wednesday it has suspended its payment service to its bank customers in Zimbabwe.
Payserv has four business units: Paynet Zimbabwe, AutoPay, Loanserv and Softserv.
The investment company said Payserv has suspended its service due to a “collective refusal to pay historical and contracted pricing to Payserv Africa in US dollars”.
Cambria said it has written commitments made by its bank clients made prior to May 31 that they would honour Payserv’s invoices in US dollars. However, since that date, the government has introduced a new currency.
The governor of the Reserve Bank of Zimbabwe, John Mangudya, instructed banks that the central bank would not object to Payserve receiving payment in US dollars.
Cambria is now claiming the banks in the country – which includes London-listed Standard Chartered PLC as well as South Africa-listed lenders Standard Bank Group Ltd and Nedbank Group Ltd – have told the company they would be prohibited from paying external invoices by the central bank if they paid Cambria in US dollars.
Cambria said it has lost USD170,000 providing services to Zimbabwe banks in March and April and noted it is owed over USD470,000 for over 4 million transactions since May 1.
“The company cannot allow further accumulation of possible losses. The company estimates that in 2018 banks netted USD5 in profit for each dollar invoiced to them. Collectively in 2018 banks netted over USD22 million in profits via charges to its account holders for services provided by Paynet,” Cambria said.
“Despite this highly profitable relationship with Paynet, banks have stonewalled the company’s attempt to maintain the US dollar value of its services following the devaluation of the currency to ZWL5.86-to-1 US dollar on the interbank market,” the company added.
Cambria said “not a single bank” has taken the steps toward paying its May invoice: “As and when such banks pay their invoice, they will be reinstated and their payments will be executed free of charge at any bank,” the company added.
Cambria has also taken umbrage with the banks refusing to reply to the company but instead mediating the issue through the Interbank Operations Committee, Zimbabwe’s banking body.
“We can only hope sanity will prevail and banks will re-engage with us as partners instead of pursuing a group strategy of beggaring their supplier. If it doesn’t, we believe in the long term Cambria’s resources and prospects are sufficient to redirect its focus and regain any profitability lost to recalcitrant banks,” said the company.
Shares in Cambria Africa closed down 12% Wednesday at 0.66 pence each.
At the end of May, Cambria released its interim report and warned of potential problems of Zimbabwe introducing a new currency.
The Reserve Bank of Zimbabwe officially decoupled its local currency from the US dollar, naming the new currency the RTGS dollar, with the symbol ZWL.
The bank then “effectively devalued” the new currency towards the end of the period. The rate fell from parity to the US dollar to ZWL2.50 to USD1.00 and closed at ZWL2.50 at the end of the period.
Source: London South East