On the 22nd of August Ecocash officially rolled out a mobile Bureau De Change. According to them, it’s the first-ever Bureau De Change in the mobile money domain. Essentially by using the platform you’ll be able to convert your money on your phone from wherever you are. The platform will be most relevant to those that have foreign currency account (FCA) mobile wallets. The Bureau De Change will allow such account holders to convert their US dollars into RTGS$. In this article, I discuss how the platform works and some interesting insights from the public’s reactions.
Using The Bureau De Change
In order to access the platform, you have to dial *150#. Once you dial that code you’ll be taken to a menu titled Ecocash Services. You’ll then go ahead to choose the first option which is the Bureau De Change. Upon getting onto it you shall see 3 options namely, Exchange Rate, Sell USD and Terms & Conditions. In case you’re wondering which scenarios can necessitate such conversions let me briefly discuss them. The first and obvious one is when someone has an Ecocash FCA – that person might want to sell their US dollars. Secondly, is in cases where someone receives diaspora remittances into their FCA wallet. There are also instances when non-governmental organization personnel can receive funds into their FCA wallets. The fourth one is when there’s a bank transfer to an FCA wallet. Exchange rates will be at whatever rate will be obtained on any particular day. You can find out prevailing rates using the first option on the Bureau De Change menu.
Implications On The Public
The first thing to note here is that this service will be relevant to those who already have Ecocash FCA wallets. So it might not immediately become a hit feature with many people. After all, even the FCA account holders might not be too hyped up about this Bureau De Change. I’ll explain why a bit later on. Those that don’t have FCA accounts will have to have one setup. That process entails making a deposit of US dollars into the account to activate it. Considering how people are so keen on keeping their US dollars in cash this might mean not many people will jump into creating FCA wallets.
Implications On The Exchange Markets
On the day the Bureau De Change was launched Ecocash was offering higher rates than banks. They were offering RTGS$10.80 for US$1 whereas banks were offering, on average, RTGS$10.24 for US$1. On the same day, the black market was offering RTGS$11.25 for US$1. So it’s apparent that the black market still remains the most preferable exchange platform due to higher rates than banks and the Bureau De Change.
A Look At Why The Bureau De Change Might Receive Widespread Adoption
I have highlighted some issues regarding that not everyone has an FCA wallet. I’ve also pointed out that the process required to create an FCA wallet might cause people to be indifferent to opening one. Let’s look at some other pertinent aspects that we can’t ignore:
Many of you will agree that not many goods and service providers accept Ecocash as a means of payment. This is mainly due to the fact that most businesses procure their stock by paying in foreign currency i.e. US dollars or Rands, amongst others. So picture a scenario where a business accepts Ecocash payments. They would need to then buy foreign currency later in order to procure their stock. Here’s where it gets tricky, buying foreign currency directly from Ecocash is a tall order. Normally one would have to cash out and then use the cash to buy foreign currency. That whole process involves charges which end up watering down the value of the initial money received. It’s with this background that most businesses don’t accept Ecocash payments. What then does this mean for the transacting public? It means that not many people might be keen in converting their US dollars in their FCA wallets. This is because their converted balances might be difficult to use when they want to pay for goods and services. For instance, lower-end markets (e.g. market produce stalls) and mass transportation service providers usually demand cash when making payments. This of course is debatable as some reactions on social media are suggesting. What do you think?
Kuda Musasiwa, founder and owner of Fresh In A Box made an interesting comment on Facebook. Musasiwa advised diasporans against using Ecocash for remittances back here. He explained his rationale by giving an example. Suppose you’re in the diaspora and you send someone back here US$100. Using the RTGS$10.80 rate it means they get RTGS$1080. Recall what I earlier on discussed about needing to have cash to make most transactions. That person then has to cash out that money. We all know how that virtually every Ecocash Agent is rogue and uses steep cash-out charges. Even if it’s not an agent anyone would charge a steep charge to cash out. Supposing that cash out charge is 40% that would mean that from the RTGS$1080 you end up getting around RTGS$600 in cash. To put things into perspective let’s say you then buy US dollars cash using that amount you end up having significantly less than the US$100 sent initially. Kuda Musasiwa’s point in the example he gave is that Ecocash stands to actually benefit way more than the consumers – especially when it comes to diaspora remittances.
That’s about it regarding the recently introduced Ecocash Bureau De Change. Would really appreciate your comments in as far as what you think about this development. Does this new platform bring convenience to the customer or it’s meant to enrich Ecocash? Let’s hear your comments below.