ZIMSWITCH announces new ZiG ZIPIT limits

ZiMSWITCH Announces New ZiG ZIPIT Limits

In a move aimed at streamlining financial transactions in Zimbabwe, ZIMSWITCH, the national payments provider, has announced new limits for sending and receiving money using the ZIPIT platform. This comes after the recent introduction of the ZiG, the new Zimbabwean currency, replacing the inflation-battered ZWL. Let’s delve into what these new limits mean for you.

Understanding ZiG Limits

Gone are the days of trying to decipher ZWL transaction limits that constantly changed due to inflation. With ZiG, things are a bit clearer. The new system introduces two key limits for ZIPIT transactions:

• Person-to-Person Limit: You can now send up to ZiG 2,400.00 to another person in a single transaction. This is roughly equivalent to US$180 (conversion rate: ZiG divided by 13.56).
• Monthly Limit: Your total ZiG transfers via ZIPIT over a month cannot exceed ZiG 8,000.00, which is approximately US$590.

In simpler terms, you can send up to ZiG 2,400.00 at a time, but the total amount you send and receive in a month cannot be more than ZiG 8,000.00.

Using ZIPIT for ZiG Transactions

ZIPIT, a familiar platform for many Zimbabweans, remains the go-to service for sending and receiving money electronically. The good news is that ZIPIT works seamlessly with the new ZiG currency. You can use ZIPIT to transfer ZiG between:

• Banks and Mobile Wallets: Send ZiG from your bank account to a mobile wallet like EcoCash or OneMoney, or vice versa.
• Different Banks: Transfer ZiG directly between accounts held at different banks, even if they are not the same institution.
• Mobile Wallets: Send ZiG between EcoCash wallets, OneMoney wallets, or even from one to the other.

This flexibility makes ZIPIT a convenient tool for managing your ZiG finances, regardless of where your accounts are held. As already noted you can use ZIPIT even if you only use Ecocash.

Comparison with Previous Limits

Previously, keeping track and making sense of ZWL transaction limits was a challenge due to the fact that the ZWL kept losing value. The new ZiG limits offer much-needed stability and clarity. Additionally, with the ZWL losing a staggering 95% of its value since January 2024, the ZiG limits provide a more realistic and usable benchmark for everyday transactions.

Comparison with South Africa’s EFT

For those familiar with neighbouring South Africa’s Electronic Funds Transfer (EFT) system, here’s a quick comparison:

• EFT Limits: South Africa’s EFT allows for a maximum transaction of R5,000 (approximately US$250) and a monthly limit of R1 million (approximately US$50,000).

While the South African EFT limits appear higher, it’s important to consider the economic contexts of both countries. Not may people in Zimbabwe need such generous limits and most people are going to find the ZIPIT limits more than adequate unless of course you own a shop or are an illegal foreign currency dealer.

Importance of ZiG Limits

The introduction of ZiG limits plays a crucial role in curbing activity in the black market. By establishing clear boundaries for electronic money transfers, authorities aim to regulate the flow of ZiG and minimize illegal currency exchanges. It’s important to note that physical ZiG notes and coins won’t be in circulation until April 30th, 2024. Until then, relying on ZIPIT for your ZiG transactions will be essential.

ZIPIT’s new limits appear like they are meant to preempt the parallel market. They are adequate for individuals but not good enough for informal traders, shops or the would-be black market traders. The thing though is that most transactions are now in USD. The 80% estimate is often thrown around a lot these days. This means that it is estimated that about 80% of transactions in Zimbabwe are now being held exclusively in USD. Of that remaining 20% of ZWL now ZiG transactions the bulk are for paying ZESA, council rates and of course buying and selling foreign currency illegally.

With ZESA now accepting USD cash payments being too restrictive on the use of the ZiG can be detrimental. It will spur more people to shun the currency in favour of the USD further marginalising the nascent currency.