Zimbabwe’s largest mobile money platform, EcoCash, says it has approached the Reserve Bank of Zimbabwe (RBZ) seeking approval to be designated as a national payment switch.
This was after monetary authorities in August directed mobile money operators to integrate with national payment switch, Zimswitch.
However, EcoCash feels it also has the capacity to operate as a national payment switch due to its ubiquitous nature and ability to process over 450 transactions per second.
A payment switch is a foundational element of all modern payment architectures. It’s a smart processing software that enables communication between a multitude of payment providers to process payments in the most efficient way possible.
Statistics from the Postal and Telecommunication Regulatory Authority of Zimbabwe (POTRAZ), show that EcoCash controlled 97,47 percent of all mobile money transactions in the country during the second quarter of 2020.
Cassava Smartech Zimbabwe, which owns the EcoCash platform, said it has already complied with the RBZ order to integrate with ZimSwitch and was ready to play a big role in the economy by promoting financial inclusion.
“The group has also applied to RBZ for EcoCash to be designated as a national switch,” Cassava Smartech chairperson Sheree Shereni said in a statement accompanying the company’s financial results for the half-year ended August 31, 2020.
Market analysts assert that the designation of EcoCash as a national payment system would accelerate financial inclusion in the country where close to 70 percent of the adult population has limited or no access to the formal banking system.
This view stems from the fact that the mobile money platform has fundamentally changed the way people live and interact in Zimbabwe since it was introduced to the local market in 2011 as a result of its efficiency, reliability and affordable fees.
Shereni said the group recently revamped the EcoCash system to ensure that it has capacity to handle large transactional volumes.
“The new EcoCash system, which we migrated to in the previous financial year, has stabilised and we are proud to announce that all issues that occurred during the change – over were adequately resolved.
“The system now has capacity to complete 450 transactions per second from an average of 200 transactions per second before the upgrade,” she added.
This comes after the company had a brush with authorities leading to the closure of agents lines for its customers, limiting Ecocash lines to one and setting a transaction cap of $5000 for the customers.
Finance and Economic Development Minister Professor Mthuli Ncube recently emphasised the importance of financial inclusion in promoting inclusive growth by providing access to financial services, loans, credit and insurance, thereby allowing citizens to engage in gainful economic activity.
Zimbabwe has been implementing the National Financial Inclusion Strategy (2016-2020), through various initiatives targeting previously marginalised segments. The financial inclusion gains that have been made were, however, threatened by the outbreak of Covid-19.
“Financial inclusion has multiple benefits, which include conferring opportunities to the traditionally unbanked, thus lifting households out of abject poverty thereby promoting transformative and inclusive growth,” Ncube said in the National Development Strategy document.
“Improving financial inclusion will entail increasing the percentage of financially included persons from 77 percent to 90 percent by 2025.”
The Minister added that ongoing digitalisation of financial services on the back of rapid advancements in ICTs and the accelerated evolution of Fintech and Techfin platforms have created a wider scope for deepening financial inclusion.
“The momentum for financial inclusion has also gained pace, reflecting the prevalence of ICT based new products and channel offerings.
“To ensure that the marginalised groups of society are financially included, and can fully participate in various economic activities, the Government will promote ICT driven innovation and innovation hubs across key sectors of the economy,” Prof Ncube said. – Business Weekly