It has emerged that the central bank has approved a tariffs hike for Ecocash transactions. It is not yet official news but well-placed sources have cited this upcoming development. It is reported that the approval was made at the end of last week. Initially, there had been indications that the tariffs hike would take effect on the 27th of January. It seems though that the tariffs are still the same meaning the tariffs hike will be rolled out in due course. Just moments ago I did some Ecocash transactions to see if there are any changes but they are still the same. Judging from the fact that Econet has not yet made any official communication it is apparent the hike is yet to take effect.
Negative Effects On Costs Of Living
This development, when it finally takes root, will have a negative effect on the consumers. Zimbabwe has become a nation mainly characterised by cashless transactions – chief amongst them being Ecocash transactions. This has been necessitated by the perennial scarcity of hard cash or the cost of getting it thereof. A hike in transaction tariffs will only amount to one thing – an increase in pricing for goods and services when paying using Ecocash. Not only that, even when doing basic Ecocash transactions the cost to the consumer will be unsettling. Consider the simple process of checking one’s Ecocash wallet balance; you are currently being charged RTGS$0.50 for that. One wonders how much it is going to be after the tariffs hike.
The Lack Of Formidable Competition
It has always been a topical issue of how steep Ecocash tariffs are. Despite the stagnancy of most people’s income streams, the biggest mobile money operator is still going to hike tariffs. I believe Ecocash can do that without any reservations because they enjoy significant market dominance. Thus they will still have millions of Zimbabweans using their platform – despite the tariff hike. One of the key bases for this is because Ecocash has no formidable competition.
Ecocash has a market share of several points beyond 99% making it the biggest locally. One Money which is the second-largest has a market share of less than 1 %. Clearly Ecocash has virtually no significant competition at all! Recently One Money has been trying to lure away customers from Ecocash but it has not done much to unseat Ecocash. It is this lack of formidable competition that somehow puts Ecocash at a place where they can do anything they want.
Just consider a subscriber being charged RTGS$0.50 for just checking their Ecocash wallet balance. Ecocash has around 9 million subscribers therefore it is obvious they realize millions of RTGS dollars from just wallet balance checks alone. Yet they still go on to apply for tariff hikes despite making all that money – ironically, even getting their application approved. I strongly believe that if there was a formidable competition this would not happen. Ecocash enjoys an unhealthy dominance that makes them comfortable in putting in place self-serving measures. This is all done with a seemingly oblivious attitude towards the plight of ordinary Zimbabweans.
So we wait to hear officially from Ecocash what the new tariff regime will be like. Ecocash had somewhat become a relief especially in light of the cash shortages or high premiums placed on converting Ecocash money to cash. People have, on most occasions, converted cash to Ecocash in order to boost their purchasing power. Sadly, the go-to platform is now going to hike tariffs which will be a heavy blow to the financially struggling majority. Plus this development will have ripple effects that will spread throughout the whole consumer world. Some businesses do not already accept Ecocash as a payment method due to transaction charges. What more when the tariffs go up? It will not be surprising to see more goods or service providers choosing to decline Ecocash payments. Alternatively, they might opt to place higher extra charges in a bid to cushion themselves against the increased tariffs. At the end of the day, it is the consumers that are left ailing because the cost of living will continue to surge.