How EcoCash Controls Zimbabwe’s Financial System
Business Main News Money & Markets Zimbabwe

How EcoCash Controls Zimbabwe’s Financial System

Ecocash chief executive, Natalie Jabangwe

The Reserve Bank of Zimbabwe has announced a controversial ban on cash transactions on mobile money, a move it says was needed to deal with agents and stores using the cash crisis to charge high premiums on cash withdrawals.

Ecocash chief executive, Natalie Jabangwe
Ecocash chief executive, Natalie Jabangwe

In response, EcoCash, the largest mobile money platform, has filed an urgent court application to have the order reversed, and to bar the RBZ from taking any such action again in future. In its court application, Cassava Smartech, the parent company of EcoCash, says it will have to shut down the entire EcoCash system in order to comply with the withdrawal of the cash-in/cash-out capability, which it says is the core of the system.

Should this happen, it would cause significant disruption to the country’s financial system.

EcoCash was launched on 29 September 2011, partly to solve the cash crisis. Since then, EcoCash’s heavy investment has built it a monopoly over mobile money, a market position that was only deepened by a bank note crisis that drove most transactions onto electronic platforms.

After RBZ’s move, EcoCash’s hold on the economy has come to the fore. In its court papers, Cassava basically dares RBZ; retreat, or we shut this whole thing down, and stall the whole economy.

“Pulling down EcoCash could thus mean loss of life, loss of opportunities that could save livelihoods and financial loss running into hundreds of millions if not billions,” Cassava says in its papers.

For Government, it’s a standoff that was always coming; do they stand up to Econet and its dominant subsidiary and risk disruption, or call EcoCash’s bluff?

By the numbers, here is how much influence EcoCash has on the market.

99.4%: That’s how much EcoCash controls in terms of the value of money that moves on mobile phones, according to data from the Postal and Telecoms Authority of Zimbabwe (POTRAZ). Telecash and OneMoney process just 0.1% and 0.5% respectively.

94.5%: This is EcoCash’s share of the number of mobile money subscribers in the country, according to POTRAZ. The closest rival is far behind; NetOne’s OneMoney controls just 4.7%. Telecel’s Telecash service holds just 0.8%.

10,562,070: That’s the current number of EcoCash users, according to its court papers.

86.5%: Mobile money accounts for 86.5% of all the transactions in the country. Of these, EcoCash controls 94.5%. EcoCash is also plugged in to at least 10 banks, allowing users to move money between their bank accounts and phones.

44.7 million: The number of mobile money transactions in the week to September 6, according to the last available data from RBZ.  

Z$3 billion: The value of transactions performed on mobile money platforms in the week to September 6, according to RBZ data.

50,000: That’s the total number of EcoCash agents that have now been put out of business after the RBZ directive. Earlier, EcoCash announced it had cancelled the licences of at least 4,000 agents for charging illegal commissions for cash withdrawals.

US$78 billion: That’s how much EcoCash has transacted on its platform since launch in 2011, according to the last results of Cassava Smartech. In terms of cash transactions alone, EcoCash, in its court papers, says it has handled cash-in transactions worth US$10.2 billion and Z$7.54 billion since 2011.-newzwire

Leave a Reply

Your email address will not be published. Required fields are marked *