Yesterday news broke that the government had recently passed Statutory Instrument 80 of 2020 titled Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations,2020. Yes that’s right instead of passing laws through parliament as is the norm we have yet another Statutory Instrument but that is the story for another day.
The most exciting provision of that new law is that it makes it mandatory for all mobile operators to be able to send money through to one another something that has thus far been not possible. In all fairness, the government has been nicely asking mobile wallet operators to do this for a long time with little success. A lot of people have said it was Econet (now Cassava Smartech) who own Ecocash that were dragging their feet as the situation was benefiting them.
It shall be mandatory for every money transmission provider and mobile banking provider shall be connected to a national payment switch, as shall be directed by written notice by the Reserve Bank from time to time that enables interoperability of payments systems and servicesSection 4 (I) of SI 80 of 2020
The RBZ almost certainly wants Ecocash to implement ZIMSWITCH
One can easily surmise from the above that the RBZ just wants Ecocash to join ZIMSWITCH period. This legal instrument is just meant to compel them to do so. In fact the whole instrument is set up in such a way as to allow the RBZ to get a window into the operations of mobile money transfer systems which have been sort of murkey. The key target seems to be illegal foreign currency trade rather than to benefit the transacting public.
In fact, I contend that the benefits would probably be material but not as far reaching as some people seem to think. The new law will mean there is now a direct link between OneMoney and Ecocash for example via ZIPIT. If you have money in your Ecocash wallet and want to pay someone with a OneMoney wallet you just ZIPIT the money to their wallet.
It does not mean that OneMoney agents will be able to cashout their money from Ecocash agents. In fact it’s the same situation we see with banks right now. You can send money to customers who bank with other banks but you cannot walk into another bank and demand a withdrawal. For all their strides OneMoney simply do not have the ecocasystem to match let alone beat Ecocash’s setup. Interoperability is not going to change that so do not for a second expect to see people flocking to OneMoney from Ecocash.
For all its problems there is simply no compelling reason to leave it for OneMoney. Telecash is just an invisible competitor that has almost zero visibility in the market. I mean when was the last time you saw someone using Telecash on their phone or the card? For me it has been never. Being able to send money to Telecash isn’t going to change that surely.
So to conclude the new directive is a welcome move that will compel Ecocash to implement ZIMSWITCH but it is hardly going to hurt Ecocash nor will it see people leaving the leading mobile money operator. It introduces some convenience while bringing mobile money into the banking fold where the RBZ can better scrutinise mobile money movements.
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