Zim banks impose card use limits on travellers
WEALTHY Zimbabweans with Visa or MasterCard bank cards face a fresh hurdle when they travel abroad — restrictions on how much money they can withdraw or spend with their cards.
As Zimbabwe moves to preserve scarce cash resources in an increasingly struggling economy, local banks have started to limit ATM withdrawals for customers using Visa when outside the country at $500 (about R7 200).
Point of sale transactions on Visa while outside Zimbabwe are curbed at $2 000.
Zimbabweans are not allowed to take more than $1 000 in cash when they travel outside the country.
There are growing calls for the rand to be accepted as currency in Zimbabwe as a way of coping with the liquidity crisis.
CBZ Bank, the biggest finance institution in Zimbabwe, said in a notice to depositors this week: “In line with market conditions, CBZ Bank has revised limits on international and local Visa card transactions with effect from November 1 2016.”
The bank has already imposed Visa withdrawal limits from cash machines within Zimbabwe of about $200, although this is subject to availability of cash. Most banks in Zimbabwe, and especially ATMs, frequently run out of cash.
CBZ has also capped Visa card internet payments at $1 000 a day, which will be a blow to e-commerce and other internet transactions.
The government in Zimbabwe has been encouraging the use of plastic money and internet payment platforms as a way of dealing with the cash crunch the country is facing.
Other banks that have placed limits on Visa and MasterCard transaction values include Stanbic Bank, the Zimbabwe unit of Standard Bank.
An official in the Zimbabwean banking sector said this week the limits were expected to be industry wide.
“It is in line with the regulation of the use of the limited foreign exchange resources we have, and all banks will be expected to have those limits,” the official said.
“Those cards can also be used to externalise forex through withdrawals in other countries, so the regulator is also being tight on the cards.”
Stanbic Bank Zimbabwe confirmed during the week that it has introduced limits on its Visa card for transactions outside Zimbabwe. “The ATM withdrawal limit is $100. As for Visa card [transactions], the limit is $3 000 per day,” it said.
According to figures released by the Reserve Bank of Zimbabwe, “the total value of mobile- and internet-based transactions” at the end of August stood at $766million, compared with $709.2-million the previous month.
Many businesses are failing to clear their debts on time because of arrears in clearing international financial transactions from Zimbabwe.
In the past few weeks, demand for cash has outstripped supply, with long queues once again a feature at banks. Banking officials say applications for bank cards are increasing.
Wealthy Zimbabweans had, prior to the latest curbs on Visa payments, largely escaped the cash restrictions as they used their credit cards for transactions outside the country.
Finance Minister Patrick Chinamasa said earlier this year that “the days of buying trinkets are over” and that tight measures would be imposed on the use of foreign currency.
Zimbabwe continues to bleed funds, with the central bank saying this week that net foreign capital outflows were $4.31-million in August, following outflows of $5.2-million in the previous month.
The drop month on month was “on account of a slowdown in foreign investor disinvestments from the Zimbabwe Stock Exchange”, the bank said.
Vice-President Emmerson Mnangagwa has said the government will introduce local bond notes at the end of month and the US dollar, now the main legal tender in Zimbabwe, will no longer be accepted for purchases of local items.
Demand for cash has outstripped supply, with long queues a feature at banks