Ecocash is no doubt a pale of it’s yester-year self. This is now even being reflected in the revenues that the service is bringing into the Cassava Smartech group. The total value of transactions processed via Ecocash has also declined drastically compared to last year’s levels. This is all thanks in large part to the RBZ’s actions a few months ago as well as a general trend towards dollarisation.
These days it is quite possible to go through an entire day without using Ecocash. This is something that would have been nigh impossible during the same period last year when the mobile wallet service became an indefensible part of our lives. Leading the pack of those using the mobile money system were illegal money traders who made brisk business selling US dollars while the government stubbornly continued to resort to a fixed exchange rate.
The evidence is not just anecdotal, things have however changed drastically:
- This year only 19% of the total value of National Payments transactions were processed through Ecocash compared to 30% from last year. This is still a lot of transactions but quite the comedown.
- Ecocash’s contributions to the entire Cassava group has also declined.
EcoCash revenue contribution, at 63% compared to 73% realised last year have declined, both as a result of macro-economic factors and regulatory changes that took place during the period under review, as well as contribution from the exponential growth in the Insurtech and ODS business units,Cassava chairperson Sherree Shereni
Bruised from the battle with the RBZ
For a long time the Reserve Bank of Zimbabwe turned a blind eye to questionable practices taking place in the Ecocash system. Then the system grew to a size when it started to think it was too big to fail. The payments monopoly liked to throw it’s weight around and there were even rumours of Ecocash bullying those who used it’s platform to further its agenda.
Then the RBZ feeling the heat from the political leadership and the disgruntled populace pounced. In a series of measures, they docked Ecocash’s long tail until there was nothing. They introduced shocking measures such as banning cash-ins and cashouts, banning agents, limiting individuals to only one wallet and restricting the maximum amount of money one could move on the platform and just like that the crown slipped from Ecocash.
The service makes money by charging a fee each time customers move money and thanks to the central bank’s measures less money can now be moved on a given day or week. This has unsurprisingly crippled the service’s ability to make money. It’s not just the RBZ, the increased usage of the US dollar has also meant that the service is just not as popular as it was. Without agents, their USD service is just nowhere near as popular as the ZWL wallet.
Then there is the issue of failed transactions which the company continued to ignore. The company’s CEO came out praising the company for effecting its famous upgrade that was made last year but did not really apologise for the way the company continued to fail customers whenever money disappeared during transactions. There are still people who are owed thousands possibly much much more in failed transactions. A lot of people shy away from doing large value transactions on the platform because of this.
The second largest mobile money operator, OneMoney has weathered the storm well. This is in no small part thanks to their debit card which allows them to exceed transactions limits. Why Ecocash doesn’t introduce their own card is an enduring mystery to which we have no answer. It’s a shocking oversight for an entity that prides itself on being an innovator. Much resources are being wasted on Sasai which has no hopes of succeeding while ignoring obvious opportunities.