National Payments Systems Report highlights

The National Payments Systems 4^th Quarter Ending 31 December 2018 Report has been released by the Reserve Bank of Zimbabwe (RBZ) and it makes for interesting reading. We look at major highlights of this report.

Payment Streams

The value of transactions processes through the National Payments System in the 4^th Quarter which ended on 31 December 2018 rose to US$44.89 billion from US$43.83 billion recorded in the previous quarter. Interestingly, RTGS transactions contributed 54.59% of that with 29.87% coming from mobile money while internet banking contributed 7.93%. Cash transactions were only 2.14%. Cash continues to disappear. RTGS and cash payment streams recorded increases from the 3^rd quarter while mobile and internet banking decreased. As expected, SWIFT foreign currency payments decreased to US$0.77 billion in the 4^th quarter from US$0.83 billion in the previous quarter. SWIFT foreign currency receipts increased to US$0.816 billion.

Evidently, service providers are embracing and adapting to the ever-increasing use of plastic and electronic money. Point of sale population increased to 99 935 from 90 541. Debit card population also increased from 4.58 million to 4.73 million as well. Due to persistent cash shortages, ATM population decreased from 564 in the 3^rd quarter of 2018 to 551 in the 4^th quarter. Very few, if any ATMs are still dispensing cash countrywide. The uptake of mobile financial services is also increasing. There were 6.14 million subscribers recorded in the fourth quarter as compared to 6.01 million in the 3^rd quarter of 2018. 5.4 million subscribers were recorded in the 2^nd quarter of 2018 and 4.9 million in the 1^st quarter. The trajectory continues to go upwards. This can be attributed to government’s thrust on financial inclusion as well as increasing global mobile penetration rates.

Ecocash problems

Given the above, it is not surprising that there was widespread panic when Ecocash experienced some glitches last week. Ecocash has become the most used mobile money platform around the country. With 97% market share in the mobile money business, it is plausible to say that Ecocash contributed most of the 6.14 million subscribers and most of the US$13.4 billion that was processed through the mobile money stream. These numbers are likely to grow further with the launch of Sosholoza, a WhatsApp banking platform allowing Ecocash, Telecash, One Money and all banks to transact seamlessly in one place. The above statistics will also give mobile phone operators more ammunition as they negotiate with the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) to hike their tariffs. They are bringing in the money and as such, they must be supported so that they do not go out of business. The last thing we want is old and slow infrastructure resulting from lack of repairs and maintenance.

As the country adapts to the Monetary Policy and other government interventions, we are keen to see how this will affect payment systems going forward.