The country’s leading payments provider, ZIMSWITCH has announced that it has partnered up with Visa. This follows the announcement made last year by ZIMSWITCH that they had partnered up with with MasterCard. Both announcements included the usual vague market speak that make it difficult to ascertain the extent and value of the partnership. It’s not really clear what you and me as consumers will get from the announcements.
What ZiMSWITCH said
“Zimswitch is delighted to partner with Visa at a time when the country is witnessing tremendous growth in electronic payments. We believe this partnership will inspire confidence and encourage further investment in our region”ZIMSWITCH CEO’s statement on the partnership
According to our friends at Techzim, the partnership will see Visa and ZIMSWITCH teaming up to offer Zimbabweans EMV cards which they can use to make domestic and international payments. These cards will come will naturally come with a ZIMSWITCH and Visa logos on them. EMV cards are those cards that come with a chip on them, you insert them into the POS/Swipe machine instead of swiping them.
Now if you are baffled, you are not alone. Zimbabwean banks already do have partnerships with Visa and MasterCard that allows us to make local and international payments. At one point most banks had a single card which you could use to make local and international payments. Local payments were powered by ZIMSWITCH and international payments by MasterCard or Visa depending on the card or bank in question.
Then 2018 happened. Finance Minister Mthuli Ncube ordered banks to separate between local RTGS and actual USD leading to the creation of so-called Nostro USD accounts which are not really Nostro accounts at all. The result has been that you need two separate cards if you want to make payments. You need a card with ZWL for local payments and a card preloaded with USD to make Visa/MasterCard international payments.
What the partnership might possibly mean
I am moved to speculate that maybe ZIMSWITCH partnerships with Visa and MasterCard are aimed at resolving this use of multiple cards. With ZIMSWITCH implimenting Visa/MasterCard payments on it’s National switch we can have a situation where a user can just use a single card to make payments like in other countries. When you make a local payment money is taken out of your ZWL account and when you make an international payment money is taken out of your Nostro account for example.
In both instances ZIMSWITCH decides how the transaction is handled or even if it’s accepted. We can even see a situation where banks will just have to issue cards and ZIMSWITCH handles all transactions under the guise of the RBZ instead of the current situation where each bank has it’s own partnership with Visa and MasterCard. Everything will be funelled through ZIMSWITCH.
The first developement will be welcome for the sake of ecommerce in Zimbabwe. I however dread that the second development will also become a reality. Last year the RBZ ordered all fintech companies including Ecocash to connect to the National payment gateway i.e. ZIMSWITCH. All inter-bank and institutional payments have to go through them. This has a way of stifling innovation and creating a monopoly.
Or the partnership could really mean nothing. Maybe, ZIMSWITCH is tired of developing their own in-house software and wants to pawn that job off to Visa and MasterCard and you as the customer will not even see or feel the changes.