Zimbabwe is well known for its ever eventful fiscal and monetary trajectory. The introduction of the multicurrency regime, its subsequent scrapping later on, and the coming in of the bond are some of the notable highlights of that trajectory. Need I even go at length to talk about how the bond used to be 1:1 with the US dollar – a parity that later was revoked. Not forgetting to mention EcoCash which has become one of the most preferable financial transactions platforms locally. The short of it is that all such developments have led to interesting payment options that people can choose from. In this article, I shall be discussing the different payment methods with an aim to compare to them.
Cash shortages have been a huge challenge in Zimbabwe. This has led to the commoditization of cash which people now sell on the black market. This is something that would have been unimaginable pre-2007 but it is now commonplace. The scrapping of the 1:1 parity between the bond and US dollar fuelled the selling of cash even more. Basically cash is regarded nowadays as a premium commodity. People essentially do not prefer to pay using cash because it is not that easy to come by. If you cannot get it from the bank (where it is scarce and there are usually queues) you are most likely going to buy it from the parallel market.
However, there are certain scenarios in which you must have cash if you are to have your payment accepted. For instance, most transport operators insist on cash for payments. If you have the cash it is very easy for you to make payments anywhere and for anything. There are variations though since cash can either bond or US dollars or Rands. I mention that because even with bond cash you might find some places where that is not accepted. Overall, if you have cash you are largely at peace knowing that the possibilities of not getting your payment accepted are slim to none.
EcoCash has become the go-to payment method for most people because of several reasons. Before I go on it is worth noting that not everyone is keen on accepting EcoCash for payments. For instance, most business players procure their stocks from sources that probably insist on bond cash or foreign currency. This arm-twists them to not accept EcoCash when their customers subsequently buy from them. Interestingly, EcoCash is very convenient when buying from big supermarkets such as OK, Pick ‘n Pay, and the like. The irony is in that despite the obvious disparity between bond cash and bond EcoCash, it is 1:1 in such supermarkets. Thus if you want to pay for something costing ZWL$50, if you pay using EcoCash or bond cash, it will still be ZWL$50. When you relate that to the selling of cash it is no wonder why people then sell cash (if they have it) to get EcoCash balances. Essentially bond cash is more when converted to EcoCash. This is what makes paying using EcoCash a hit these days. The only limitation is that not all businesses do what the likes of OK do. Most place a mark-up if you say you are paying using EcoCash.
The dynamics of RTGS is interesting because the terms now refers to a system and also our local currency – it can be very confusing when you think of it. Anyways, in the context of this article, I am referring to paying using bank cards and transfers. In some respects, people pay using bank cards just because they have no better option. Actually, due to the preference for EcoCash, some actually transfer their bank balances to their EcoCash wallets. Earlier I spoke of how transacting with cash is much easier. Sadly, getting cash from banks is not as easy plus sending it to EcoCash or buying cash can be costly. In light of that people end up just paying using RTGS – in my observation people tend to go for RTGS because it is hassle-free mostly. It is not necessarily the best payment option though that depends on one’s perspective.
The funny thing about US dollar payments is that it is was officially banned as legal tender. Regardless, people have continued to pay or accept payments in US dollars. The greatest convenience about paying using US dollars is that comparatively, prices in US dollars have actually decreased over time. Though paying using US dollars is arguably one of the (if not the best) payment methods, it is not exactly legal. There is actually an ongoing discussion where people think that the latest developments in the country are pointing to re-dollarization.
The bottom line is that there is no one payment that is convenient all around. The respective situation and the context, amongst other things, are determinant of which payment method is convenient. Do not just settle for one payment and religiously use it at all times. Weigh and consider each scenario or context separately because the convenience of a particular payment method can stand out for one scenario and might not for another scenario.