Late yesterday the Reserve Bank of Zimbabwe swung the axe against Simbisa’s popular InnBucks system calling the service illegal as it has not yet been registered with the central bank. The ban was with immediate effect which means customers can no longer make deposits into the system or transfer money to third parties. Customers who have money in their wallets have 30 days to make withdrawals at any one of Simbisa’s many outlets.
PRESS STATEMENT CESSATION OF INNBUCKS OPERATING AS A MONEY TRANSFER SERVICE PROVIDER
The Reserve Bank of Zimbabwe (the Bank) advises the public that it has ordered Simbisa Brands (Private) Ltd to cease operating the money transfer service branded or styled InnBucks, with immediate effect.
In November 2021, the Bank directed InnBucks to apply for and obtain necessary approvals in order to continue offering the service To date, the company has not yet regularised the service as directed, hence the inevitable regulatory intervention by the Bank.
The RBZ’s notice on Twitter
The cessation of the service means that customers shall no longer be able to deposit funds into the InnBucks account or transfer the funds to third parties. However, customers may redeem their balances for cash or goods at Simbisa Brands (Private) Ltd outlets within a period of 30 days from date of this Press Statement.
Innovation killed with the stroke of a pen
InnBucks was now becoming a popular domestic remittance system and wallet rolled into one. It was like Ecocash in its heydays when you could get money easily transferred into your Ecocash wallet and walk up to an agent no matter where you were and cash out or make a purchase. They even had an excellent mobile app which is something continue to lack to this day even with their relaunched USD wallet.
The power of InnBucks lies in the extensive network of Simbisa Brands shops scattered across the nation. This means that the service had good coverage from day one. There is also the fact that the shops always seem to have USD lying around thanks to purchases by customers. This means that they could quickly fulfil cashouts without the need to have cash ferried around the country.
Now all that is gone with the stroke of a pen. It’s rather strange that Simbisa Brands a member of the powerful Innscor Africa Family could fail to do something as basic as register their service. The only explanation can be inferred from the words “regularise” which can mean a lot of things besides submitting your service for registration. It probably means that the RBZ wanted some sort of action on some aspects of Simbisa’s service rather than that the service was not registered.
Simbisa is part of a behemoth that has sometimes received deference (e.g. allowing them to sell in USD when domestic USD transactions were briefly banned back in 2019) or harsh treatment such as when they were unfairly singled out for using black market rates when pretty much everyone including the government conveniently ignores the official rate when it suits them. About the only good news from the latest “with immediate-effect order” is that WaFaya another popular Simbisa product seems to have been left alone. This one allows diasporans to deposit money into WaFaya wallets which can then be used by locals to make local purchases.
Black market angle
The ease with which InnBucks allowed people to send money to each other had already raised eyebrows in some parts of government-we have heard. Apparently, some were concerned that the service could, much like Ecocash before it, be used to fuel the black market. That could explain the drastic action.