The growth of mobile money transfer adoption in Zimbabwe has been spearheaded by the financial situation and the use of multiple currencies in the country
So said Telecel mobile financial director, Nkosinathi Ncube, addressing delegates at the Mobile Money and Digital Payment Summit in Johannesburg yesterday.
According to Ncube, when the country experienced hyper-inflation, the Zimbabwean dollar could no longer buy most basic goods and the adoption of multiple currencies helped to ease the liquidity crisis.
"Mobile money is now an alternative to the bank, and people can store their money in the mobile wallet than at the bank. It has made buying and selling of goods easier and better," said Ncube.
"All the key operators in Zimbabwe find mobile money to be the biggest use case, with more people cashing in for storage."
Most people who use the mobile money system are employed in the informal sector and earn money on a daily basis; therefore, they use the mobile money system as a storage facility instead of depositing it into the bank, Ncube pointed out.
This caused friction between the mobile money operators (MMOs) and the banks, with the latter complaining that the MMOs were being given more latitude while banks operated under the strict regulations of the Reserve Bank of Zimbabwe.
"We had to integrate the mobile money system to the switching system that banks use to promote interoperability but primarily to use mobile money in the retail sector."
He believes that the success of mobile money in Zimbabwe stems from the inconvenience that multiple currencies bring compared to the ease of mobile money.
Cross boarder traders have converted mobile money to currency, transferring money into a pool that is used to buy goods in countries like Botswana and SA, said Ncube.
He also pointed out that because of the currency situation in Zimbabwe, mobile money is addressing the problem of change. "The smallest bill that is readily available in the market is the US dollar; and people are given sweets or other small items in exchange for coins".
Mobile money operators have introduced the virtual debit card as an answer to the change issue and also for retail purposes, said Ncube. He added that virtual debit cards had not taken off as hoped but there was promise of growth.
He stated that the biggest cash-in aspect for mobile money transfers in Zimbabwe comes from the surrounding countries, especially SA, and Ncube believes that the way forward is for South African banks to link with the MMOs of Zimbabwe.
"In the future, we want to interact with South African banks to make it convenient for those in the diaspora who are our main business drivers. We want to maximise our partnerships with banks and insurance companies so that our customers can use mobile wallet without seeing or touching cash," concluded Ncube.
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