RAND RETURNS TO ZIM IN MOBILE MONEY WALLET

Mobile wallet approved

ZIMBABWE could be turning to the rand despite earlier having rejected it for official usage in the cash shortage hit country, with the central bank approving mobile phone company Econet Wireless to start offering services in rands for its mobile money wallet, which has 5 million users.

The Reserve Bank of Zimbabwe said the rand wallet would further enhance financial efficiency in the economy.

Zimbabwe currently uses a multicurrency basket including Botswana pula, Japanese yen as well as the British pound, among others.

“Given that we are operating in a multicurrency regime where the rand is one of the currencies in the basket, the launch of the rand wallet is a welcome development to further enhance the use and efficiency of the multicurrency system,” the central bank said.

A dollar crunch in the Zimbabwean economy has wreacked havoc for companies and Vice-President Emmerson Mnangagwa said in parliament that banks limiting withdrawals of newly introduced bond notes would be probed.

The bond notes, which have the same value a the US dollar, have run out in banks and the government has pumped in another $7 million (R95.7m) this week, bringing to about $17m the total amount of bond notes in circulation amid indications that the central bank will continue to pump in more of the notes.

“Last Monday, they put in another $7m and we are now at $17m… they are going to put again another amount. That is intended to ease internal commercial transactions among our people” Mnangagwa told parliament.

But this has not helped ease matters and Econet’s wallet has now gone live, allowing cash in and cash out services in the rand. The tourism industry, some banks and industry groupings prefer the rand to the bond notes.

Econet Wireless chief executive Douglas Mboweni yesterday said that its “customers are now able to either cash-in, cash-out or make payments to merchants and billers in rand”.

This effectively means that the EcoCash wallet now has two currencies, the rand and the dollar, which has until now been the sole currency on the payment platform.

The government has sought to drum up usage of plastic money, mobile money and bank cards for transactions inside Zimbabwe.

However, banks have imposed limits for card transactions both inside and outside Zimbabwe.

The limits, also effective for Visa and MasterCard, have affected the tourism industry, with tourists sometimes unable to access cash and complicating purchases for air tickets.

The move by Econet to allow rand transactions has been described by executives at the company as “timely in the Zimbabwean market where over 60 percent of Zimbabwe’s imports and exports combined are in rand” currency.

Introducing the rand in Zimbabwe is expected to reduce pressure on the US currency, which has become the predominant currency over the years but which has been in short supply.

The Zimbabwean market initially rejected the rand because of fluctuations in its value against the US dollar over the past few years.

Natalie Jabangwe, the general manager for EcoCash, said the first phase of the rand wallet roll-out will also allow for remittances on 1:1 in rand from South Africa.

Mobile wallets have resoundingly failed in South Africa, with operators stopping them this year, although mobile money has taken root in markets such as Kenya, Tanzania and Zimbabwe.

Stung by the cash shortages, most Zimbabweans are now also starting to opt for internet transactions and m-commerce, with cashless transactions firming up in the past few months, according to central bank figures.

“Additional services such as banking services and card transactions, will be gradually added on to the rand wallet system,” Jabangwe said.

Customers are now able to either cash-in, cash-out or make payments to merchants and billers in rand.