In October the Reserve Bank of Zimbabwe directed banks to separate foreign currency accounts into two foreign currency accounts types: Nostro Foreign Currency Accounts (FCAs) and RTGS Foreign Currency Accounts (FCAs). Confusing? Yes, but this is because the RTGS FCAs are not really foreign currency accounts, but local currency accounts. The move was an attempt to help preserve values for those who were earning and depositing foreign currency which was being made available to them as bond notes or electronic money in the Real Time Gross Settlement (RTGS) system.
Banks separated the accounts by mid-October. However the mobile money companies including Ecocash had not yet separated the RTGS balances from the USD balances. Last week, Cassava Smartech Zimbabwe, parent company of Ecocash, announced that they had introduced USD Foreign currency wallets for their customers. This means that the wallets will be denominated in US dollars, and allows users to maintain their money in US dollars. Customers will also be able to perform cash in and cash out in US dollars.
How to access the USD FCA Wallet
There is no re-registration required to access the foreign currency wallet, it’s already accessible to everyone with Ecocash. The foreign currency wallet can be accessed via the usual Ecocash Menu. You dial *151#, enter Pin, select Wallet Services (Option 7), then Multi-Currency (Option 5), then Change Currency (Option 2), then select Option 1 (USD:FCA Wallet). You will then be required to confirm the change by pressing 1 (Confirm). After confirmation, the default wallet will be the USD FCA wallet. On dialing *151# you will access the FCA Ecocash Wallet. You can then transact as usual in USD. To change back to the RTGS Wallet, you will follow the same steps again. However, you can’t transfer money from your RTGS wallet to your FCA wallet. You will need to deposit USD, or receive money from the diaspora, or a transfer from someone’s FCA Ecocash wallet.
Benefits of USD FCA Ecocash Wallet
Safeguards foreign currency
In line with the purpose of the RBZ directive, it provides a safeguard to people’s foreign currency deposited into their Ecocash wallets. This has been a contentious issue as it had been for the banks.
Debit Card Linkage & International Payments
Many financial services providers including Ecocash had stopped customers from purchasing online and internationally using debit cards as the values recorded in accounts were considered to be RTGS and not USD. This is because they will then have to settle US dollar purchases with RTGS, which is only valid in Zimbabwe. Ecocash has brought the ability to make international and online payments back to their customers and this will be well received.
Ecocash announced that the US dollar wallet would be linked to the Ecocash debit card and this would allow users to make payments online and outside the country. This will be welcomed by those who travel or make payments online as many institutions had stopped offering this facility.
Receiving money from diaspora
Another sticking point for consumers was the treatment of diaspora remittances. Senders would have to elect for recipients to pick up the cash from a Steward bank branch or World remit agent, if they did not do that, the amount remitted would be received in the Ecocash wallet and mixed with RTGS Balance. You will then be forced to visit an Econet Shop to redeem the USD from the RTGS Balance. The creation of a foreign currency wallet eliminates the need to be forced to pick up the money. Recipients can conveniently receive their money in their Ecocash FCA wallets in US dollars. They can then transfer the money to their FCA Nostro Bank account, or use it with Ecocash Mastercard, or cashout from Econet shops/Steward Banks. They can also keep it in the Ecocash FCA Wallet as long as they want.
Safety (no need to carry cash)
Without confidence in the safety of depositing your US dollars in the banks or mobile wallet, cash was the only option. The risks of carrying cash are well documented and we won’t go deep into them. The Ecocash foreign currency wallet brings the convenience of safety from carrying cash. In addition to this, customers will be able to transact with their linked debit card.
Ecocash users can redeem funds at Econet shops as well as Steward bank branches.
No 2% transaction tax
The contentious electronic transfer tax introduced by finance minister Mthuli Ncube does not apply to transactions from Ecocash foreign currency wallets. Many who were disgruntled by the tax policy measure will be pleased with this feature.
We await further direction on other practical aspects of the foreign currency Ecocash wallet. If you have any comments or questions we’d love to hear from you.
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