M-commerce emerges stronger from cash crunch
. . . NetOne plans to relaunch OneWallet
BITING cash shortages, which became worse last year, have inadvertently oiled mobile transactions as consumers look for convenient alternative payment platforms.
The introduction of bond notes on November 28 last year has eased, but not eliminated, cash shortages.
Whilst there were expectations that mobile money volumes would decline, statistics from the Reserve Bank of Zimbabwe (RBZ) actually show mobile money transactions have been increasing since 2012.
In the 12-month period to December 31, 2016, electronic money transactions — which include real time gross settlement (RTGS), automated teller machines (ATMs), mobile money and point of sale – rose to US$62 billion from US$57 billion a year earlier.
But it is the jump in mobile transactions that is likely to benefit mobile operators the most.
So far, Telecel Zimbabwe, which is now majority-owned by Government after the acquisition of a 60 percent stake that used to be held by Netherlands-based VimpelCom, has handled more than 3,6 million transactions worth US$110 million since January last year.
It also reports that while the volume of transactions has risen by 16 percent this year, the value had climbed 86 percent in January 2017.
As business improves, the number of merchants has also increased.
Telecash, its mobile money service, now has 1 600 merchants, up 111 percent from 761 last year.
The service continues to be tweaked to meet the demands of the transacting public.
“Telecel is continually broadening, capacitating and supporting its Telecash distribution network in order to ensure that the Telecash footprint is widened to increase convenience.
“In addition to increasing our footprint, Telecash is continually innovating to ensure that the Telecash service can be used in a bouquet of transactions and bill payments,” said Telecel last week.
Similarly, Econet Wireless Zimbabwe, through Ecocash, has also been benefiting. In the half year to August 31, 2016, Ecocash contributed US$39,2 million to group revenue, an increase of 13,6 percent from US$34,5 million recorded in the same period a year ago.
Econet board chair Dr James Myers said in a statement accompanying the interim results the cash shortages had made the mobile platform “an important method of payment for goods and services”.
Although NetOne pioneered the service, the old management failed to capitalise and conceded to competition.
The company’s acting chief executive officer Mr Brian Mutandiro told The Sunday Mail Business that its mobile money service – OneWallet – is presently being revamped.
“The OneWallet system had been highly problematic. As you are aware, it was the first in the market with a potential first-mover advantage, but somehow we lost it and the market is now dominated by other players, though we do have a presence of late.
“We have a game-changer that is coming this quarter and will replace the existing one,” said Mr Mutandiro.
He noted that the country’s second-biggest mobile operator is focusing on monetising the network.
“In the process, we have realised we are winning our customers back. This is because we are enhancing customer experience with what we have. We have had tens of thousands of subscribers migrating to our network because of this drive.
“Our OneFusion product has been embraced by individuals, corporates and churches beyond our imagination and we will continue to provide value as this in turn enhances growth,” said Mr Mutandiro.
NetOne will leverage on the current expansion project to roll out new products to the market.
The US$219 million phased expansion is bankrolled by China Eximbank.
By the end of last year, the company had drawn US$198,8 million from the facility.
Last week, economist Mr Persistence Gwanyanya said the rise in mobile banking transactions indicates that citizens are “increasingly embracing electronic money as cash challenges continue to take a toll”.
“The mobile money business is growing because one just receives money and transfers it to someone for a certain payment and it goes on like that since getting physical cash is a problem.
“In terms of financial inclusion, the development is a positive move although people are forced into the cashless society due to shortages of cash,” said Mr Gwanyanya.
Mobile operators are also adapting mobile payment platforms to include debit cards that tap from mobile wallet balances.