Yesterday evening BancABC unveiled its new partnership with MasterCard and ZIMSWITCH. The partnership will allow BancABC to issue cards that bear the MasterCard and ZIMSWITCH logos. The cards will be able to make both local and international payments. We are not sure yet how this will work but I know they will solve a nagging e-commerce problem for Zimbabweans.
What problem?
If you are a local business getting people in Zimbabwe to pay you is hard if you have an online store. You have to use less than perfect solutions like ZIPIT which is currently not automated. This means that when someone makes an order on your online store you have to for example tell them your bank account, wait for them to make the payment and confirm that you have received payment.
You can contrast this with services like PayPal or Visa/MasterCard. A customer orders what they want and can make instant payment. The payment is processed automatically. This can be a huge bonus if you are a small business that sells online or through services like Facebook Marketplace and WhatsApp. Not only can you display prices but customers can order your products and make payments online.
Before the RBZ stepped in and neutered it, Ecocash was the closest we ever got to solving the local payments problem. Using services like PayNow you could sell goods and services for Ecocash and have the transaction handled automatically. That was until Ecocash limits were drastically reduced. You cannot pay for something like a TV online using Ecocash’s current limit of $20 000. You can indeed use ZIPIT but as already pointed out it’s not perfect.
With the new partnership between BancABC and MasterCard, we will have a service that allows you to just enter your card number if you want to make local payment. This would be the equivalent of swiping without the need to swipe. Such a model would not be limited to online sales only. You could also have vendors and other informal businesses receiving payments without the need to have a swipe machine which is expensive to handle and process. The possibilities are limited and exciting.
The RTGS/USD connection
We have been in touch with BancABC with questions about how the service works exactly in terms of one card being able to make local and international payments. Will the card be linked to two accounts a USD aka Nostro account and a ZWL account? This way when you make a local payment money is taken out of your local account and when you make an international payment money is taken out of your “Nostro” account? Will your balance be converted to RTGS at the official rate when you make a local payment?
Those are burning questions and we will make a follow-up article as soon as we get answers. In any case, more will become clearer as time progress. It is also important to note that this partnership with MasterCard is through ZIMSWITCH. This means that we can expect more local banks to make similar announcements in the coming weeks or months.
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