EcoCash, Zimbabwe’s leading mobile money platform, has announced a reduction in its US dollar transfer charges following the government’s reduction of the Intermediated Money Transfer Tax (IMTT) to 2%, down from 4% effective from January 01, 2023. This development is a welcome relief for EcoCash customers, who will now enjoy lower tariffs when transacting on the platform.
You can access EcoCash US dollar transfers by dialling *153# on an EcoCash registered Econet line. The wallet allows users to cash in, cash out, send money, receive money, make payments and buy airtime in US dollars. In a notice to its customers, EcoCash has stated that the 2% tax only applies to transactions higher than US$5. It also said that all cash-in transactions were free like they have always been.
According to the new schedule, a registered EcoCash customer will pay a total of US$0.33 (US$0.20 IMT tax, and US$0.13 EcoCash fee) when sending US$10 to their friends or loved ones. At the same time, those cashing out the US$10 will only be charged US$0.17 in transaction charges which equates to 2%. Sending US$50 now attracts a 2% tax of US$1.00 and a US$0.65 transaction charge, bringing the total transfer fees to US$1.65, while those cashing out US$50 will be charged US$0.85. Customers intending to send US$100 will part with US$3.30 – made up of US$2 in tax and US$1.30 in transaction fees. Cash out of the US$100 attracts US$1.70 in charges.
EcoCash’s main competitor in the market, InnBucks, has also announced its rates for 2023. The highlights are that sending amounts above US$5 will now attract a fee of 3%, down from the previous 5%, and amounts below US$5 will only attract a fee of 1%. InnBucks is the new kid on the block and they have risen to be a formidable competitor to Ecocash. They rely heavily on Simbisa Brand’s extensive store network which means they not only have attractive rates but also have the availability of cash covered. After all, they could just piggyback the cash-rich fast food brands also playing host to InnBucks outlets.
InnBucks has spent US$4.5 million on new stores in the country and an additional US$11 million on marketing campaigns. The company’s strategy seems to be focused on increasing convenience in location, rather than competing with EcoCash on rates. However, in the remittance industry, rates are still important for customers, as it directly affects the cost of sending money to loved ones. In a country where every penny counts, it is a small wonder that most of these remittances are making an effort to make match transaction fees. Every one of them knows that charging too much will dissuade customers from using their services.
The competition in the mobile money market in Zimbabwe is fierce. The market is dominated by EcoCash, which holds a market share of over 90%. However, InnBucks and other players such as OneMoney, MyCash, and Telecash, are constantly looking to gain a foothold in the market by offering competitive rates and improving convenience in location.
The reduction in the IMTT tax is a welcome development for the mobile money industry in Zimbabwe, as it will lead to lower transfer charges for customers. EcoCash and InnBucks have both announced their new rates for 2023, with EcoCash focusing on reducing tariffs for its customers, while InnBucks is focusing on increasing convenience in location. The competition in the mobile money market in Zimbabwe is fierce, and it remains to be seen how the market will evolve in the coming months.