Public to continue using mobile money RBZ suspends agent lines Merchant account transactions tightened
THE Reserve Bank of Zimbabwe (RBZ) has suspended all money agents from mobile financial transactions but the general public can still continue to transact using the platforms.
In a statement yesterday, the RBZ reinforced Government’s directive to suspend mobile money transactions. However, the move is set to affect holders of agent and merchant lines while regular transactions for members of the public continue normally.
RBZ Governor Dr John Mangudya also said all merchant transactions have been suspended except for receiving payments for goods and services as well as payment of utilities (water, power and airtime) but limited to $5 000 per day.
Last Friday, the Government had announced the suspension of cellphone-based money transactions as investigations into allegations that they fuel black market transactions that have caused runaway inflation continued to gather pace. Dr Mangudya said while the public will still be able to transact using mobile money platforms, agent and merchant line holders will now be mandated to liquidate the mobile money via the formal banking system.
“Following the Government press release of the suspension of monetary transactions on mobile money platforms, the RBZ wishes to advise the public that all mobile money agents are suspended from facilitating mobile financial transactions with immediate effect. All merchant transactions are suspended except for receiving payments for goods and services as well as payment of utilities which have been limited up to $5 000 per day for the convenience of the transacting public,” said Dr Mangudya.
The Central Bank also banned all bulk payer transactions. Dr Mangudya said the unprecedented measures have been necessitated by the need to protect consumers on mobile money platforms which have been abused by unscrupulous individuals and entities to create instability and inefficiencies in the economy.
“Members of the public are assured that their bona fide transactions will be processed normally,” he said.
In a statement on Friday, Permanent Secretary for Information, Publicity and Broadcasting Services Mr Nick Mangwana said the move would help converge all exchange rates to the single market-based one set by the weekly auctions run by the RBZ.
The Government, said Mr Mangwana, has gathered evidence that millions of dollars were being transferred by merchants every day using mobile platforms to street runners in the black market for foreign exchange. The EcoCash system holds $8 billion in 501 000 merchant and agent’s accounts, along with large balances in suspense accounts.
With its dominant market share of around 94 percent, Government has described EcoCash as “the central pivot of the galloping black market exchange rate”. These malpractices have led to incessant price hikes of goods and services that are bedevilling the economy and causing hardship to the people of Zimbabwe. Mr Mangwana said Government has evidence that millions of dollars were being transferred by merchants every day using mobile money platforms to street runners in the black market for foreign exchange, giving them the funds to buy foreign currency to hand over to the funders.
Mr Mangwana added that the Financial Intelligence Unit of the RBZ cannot monitor these accounts the same way they can monitor dealings in the banking sector.
The Government recently suspended some agent lines to rein in the practice but new unaudited lines have been opened and are being used by criminal syndicates, it has emerged. Mr Mangwana said mobile money systems are under the communications regulator Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), not the RBZ, therefore they cannot be monitored or audited by the central bank.
Meanwhile, a snap survey by Sunday News revealed that some shops in the city were rejecting mobile money transactions, preferring cash, foreign currency or the local currency. Further, long queues were observed at banks in the city with those interviewed saying they needed cash to transact as they were failing to do so using the mobile money platforms. Nonetheless, there were other shops that were accepting mobile money.
Yesterday, all the country’s three mobile operators, Econet, NetOne and Telecel advised their customers that the new measures will not affect regular transactions. Following the announcement by Mr Mangwana, EcoCash urged its customers to wait for further clarity from the RBZ.
“We urge all EcoCash users who exceed 10 million Zimbabweans, the majority of whom do not have bank accounts, to remain calm and continue to do your business as usual.”
In a statement yesterday, Telecel said: “To our valued customers, please be advised that the TeleCash mobile money is operating as normal.” NetOne also said that its One Money services would operate normally.
In an interview with our Harare Bureau on the operationalisation of the foreign currency auction system, which commenced last week, Dr Mangudya said speculation and not sound economic fundamentals were driving the parallel market exchange rate, which continued ballooning last week, trading at 1:90, although the official rate closed at 1:57.
“The value of any currency against another is dependent on several factors. These factors include the country’s current account balance, level of money supply growth, level of inflation, level of interest rates, external debt as well as other non-economic factors. While the economic factors play a critical role in setting the exchange rate, in Zimbabwe the plethora of exchange rates cannot be explained by those factors. The exchange rates have been driven more by speculation and expectations which has resulted in forward pricing of goods and services,” explained Dr Mangudya.
Telecommunications expert Dr Dennis Magaya urged authorities to craft policies that will encourage the use of mobile money.
“Another factor is that regulation of mobile money operators is dissimilar in different countries because some are regulated by their central banks while others are regulated by telecoms regulators. Whatever the variable, the fact is that we cannot do without mobile money. We have to embrace it and develop appropriate technology to close any loopholes.”
Dr Magaya said authorities needed to preoccupy themselves with how mobile money can grow the economy.
— Additional reporting by Harare Bureau