There is now a wide array of payment methods currently used in the country. It has become evident that the two broad categories of payment methods at loggerheads are electronic payments & cash payments. Electronic payments are more expensive to do as compared to cash payments. Cash is a less convenient option though it’s preferable due to charges incurred whilst transacting electronically. However, due to the prevailing cash shortages in the country, the ascendancy of cashless transactions has been premised not on the fact that people want to but because they have to take that route. A predominantly cashless society is the trajectory the nation has to take due to technological advancements that are drastically redefining how things are done. The unfortunate thing for this nation is that, the advent of cashless transactions has imposed itself on a scantily prepared population.
Let me shall discuss some of the payment methods currently available in the country.
1. MOBILE MONEY
This is an innovative mobile payment solution that enables people to carry out financial transactions using their mobile phones. It is a mobile-based money transfer, financing & micro-financing service. It was formally introduced on 29 September 2011 & as at November in 2017, 99.8% of the mobile money market belonged to Ecocash. During that same time Ecocash registered users stood at 6.7 million (whilst there were approximately 2 million conventional bank account holders in the nation). In its first 6 years of operation it processed transactions worth over US$23 billion. Ecocash dominates the mobile money market to a point where mobile money in Zimbabwe is synonymous with Ecocash.
With Ecocash one can do numerous things namely, depositing (cashing in) or withdrawing (cashing out) money, make payments, transferring money to other users, paying utility bills such as water, electricity, cable, satellite, school fees; purchasing airtime & transferring money between the service & a regular bank account. Businesses can sign up as Ecocash Merchants and receive payments from customers via a unique merchant number. Other options for businesses include Ecocash Billers or receiving money via the usual send money option.
Some businesses are now even issuing employee salaries using Ecocash. Whilst doing all this, a service fee is deducted directly from the account for each transaction. Though most people still feel due to the unhealthy monopoly Ecocash enjoys, its service charges are still too high. One can also purchase an Ecocash Debit MasterCard which one can use on POS machines or alternatively acquire a Virtual Card Number (VCN) to make online payments.
This is the second largest mobile money platform after Ecocash. It was formally introduced on January 29 in 2014. One can deposit into or withdraw money from the e-wallet & can also send money to other users. Other services offered are the ability to pay utility bills such as ZESA bills or City Council bills. People can also deposit money from the e-wallet into any bank account of a bank on the ZimSwitch platform & having the ZIPIT facility. Airtime purchase can also be done from the e-wallet. It also offers the service of using a debit card.
This is the third largest & was launched in 2011, initially called One Wallet but was later rebranded to One Money. Just like the other platforms one can cash in or cash out, purchase airtime, make payments, transact between the service & bank accounts of listed banks. It also has a debit card just like the other mobile money operators.
This platform offers interoperability & facilitates financial inclusion. It has more than 20 financial institutions & 3rd party payment mechanisms such as mobile money operators.
Point Of Sale (POS)
ZimSwitch facilitates & services well over 87 000 POS machines across the country. Mainly found in large retail supermarkets, small to medium shops, hotels, restaurants, fast food outlets etc. On a POS terminal or machine one can pay for goods, make bills payments, get cash back, purchase airtime or make account balance enquiries using swipe cards such as bank account cards, debit cards, Visa or MasterCard.
ZimSwitch Instant Payment Interchange Technology (ZIPIT)
ZIPIT enables one to send funds instantly from any bank to another bank (provided both banks are members of the ZimSwitch platform). It’s biggest advantage is that transactions are instant, and almost all banks are now on the ZIPIT platform.
3. ELECTRONIC FUNDS TRANSFER (EFT)
Real-Time Gross Settlement (RTGS)
If you need to transfer funds from your bank account to other individuals or corporates at other banks you could use this service. It’s an online system that allows real-time transfers between banks. Gross Settlement implies that the transaction is settled on a one-to-one basis without having to net or bundle that transaction with other transactions. Settlement means once processed, payments are final & irrevocable. This option is handy for high-value transactions requiring immediate clearance. RTGS payments usually have high transaction costs. Transfers may take 1-3 working days.
4. ONLINE PAYMENT PROCESSORS
This is a digital payments platform that uses a progressive web app (PWA) to allow people to centralize their payments. You can pay using Ecocash, Telecash, ZimSwitch, MasterCard or Visa (both locally and internationally issued). The banks supported for the ZimSwitch Vpayments are CABS, CBZ, FBC, POSB, Trust Bank & ZB Bank. Businesses can sign up as Merchants to use the Paynow platform to receive payments.
Due to prevailing cash shortages, cash payments have drastically plummeted. Cash withdrawal limits from banks have significantly gone down, whilst ATMs now go for ages without cash. It is now very expensive to redeem electronic money into cash due to charges. Plus the re-emergence of the black market is also making cash so expensive to get. Some businesses demand payment in forex or at inflated bond-rated prices for bond payments. That has seen most people migrating from cash transactions to cashless ones. Cash options for Zimbabwean businesses are Bond Notes, Bond Coins and foreign currency eg US Dollar or Rands.