There is no escaping the need for online startups in Zimbabwe. What I mean by online startups is startups whose operating models entail being online. This means it can be a web app or a mobile app – essentially either or both of those approaches. Given the digital environment we now live in, it really is inevitable that we need such innovations. However, most prospective entrepreneurs in this space still grapple with the hurdle of online payments in Zimbabwe. In this article, I want to explore the dynamics and proper solutions.

Some Clarity On The Context

First off I want to clarify some things regarding the context I am dealing with here. Suppose, you are thinking of starting an e-commerce business in Zimbabwe. This implies people will be accessing your products or services through a web app or a mobile app. Your market ideally would be local Zimbabwe and possibly beyond the borders. The question now is, how best can handle online payments? There are some things to consider in answering this question. What are they?

Currency Issues In Zimbabwe

You are well aware that there are currency issues at play in Zimbabwe that present some problems. Broadly we have a multicurrency regime and a “local currency”. The “local currency” is not really a currency once you go beyond Zimbabwean borders. This means in terms of having bank accounts, you must either have a local currency account or a foreign currency account (FCA). Statistically not many people have bank accounts to start with – when looking at the whole population. Go down a notch and you will realize those with bank accounts mostly have local currency ones. This means not as many people have foreign currency accounts. Why is this so?

Income Mainly Local Currency-Based

The vast majority of Zimbabweans earn their incomes in local currency. Additionally, most people conduct their transactions using local platforms that support that local currency. I am talking of things like bank transfers, ZIPIT, and mobile money. Thus most people never have to electronically purchase stuff using foreign currency. Given that scenario, most Zimbabweans do not see the need to open a foreign currency account.

Opening And Maintaining A Foreign Currency Account Is Hectic

There are so many reasons why many people are heavily opposed to opening a foreign currency account. For many, the amount of foreign currency money needed to open on is too steep. To some, it might seem small, for most, it is not especially given most people get incomes in local currency. I will not even go into how unreliable banking services tend to be with most people avoiding the inconvenience of fruitlessly following up on queries. Then there are numerous complaints about how foreign currency account service, withdrawal, and transactional charges are unreasonably high. That is also compounded by how in the event you want to access your foreign currency money in cash that might be problematic. All these issues make it very hard for many people to consider opening foreign currency accounts.

How To Circumvent These Issues

In trying to establish an online business you will quickly realize how these issues affect you. It is relatively easier to set up online payment options for local currency. I have noticed most businesses simply settle for EcoCash using the prevailing black market rate of the day. This is all in a bid to preserve the value of the money because essentially you would have to still buy foreign currency on the black market. Here are some other ways you can use to address the challenges of online payments.

Cash On Delivery

This is one of the best ways that most businesses use to get payments in stable foreign currency. Orders and purchase will still be done online but payments will be handled physically on delivery. This is mostly applicable when dealing in goods; though it is also largely applicable for service-based if you can physically meet your clients. If you cannot, then you can explore other options such as the following.

Use Remittance Platforms

You can use platforms such as Mukuru, World Remit, and other remittance platforms in use today in Zimbabwe. You can basically include them as payment options that clients can use in paying for goods or services that you provide.

Do Include MasterCard, Visa Options

Some will still be in a position to pay using this option so do include them. Especially if your business targeting can spread into the diaspora you will need this option. It is a great way to tap into and cater for the diaspora market.

These are just some of the ways of circumventing the hurdles of online payments in Zimbabwe. The bottom line is you must explore and bring together several online payment options to cater for the different circumstances. Zimbabwean online startups I know are doing well just by providing two 3 broad options: EcoCash, cash on delivery, MasterCard, Visa, and the like. I would advise you if possible to conduct a survey for your own business and see what works best.