Econet has announced through adverts in the press the ‘reduction’ of tariffs of its mobile money transfer service, EcoCash. The move follows a directive from the Reserve Bank of Zimbabwe (RBZ) and general pressure from the market to review the charges. The Reserve Bank of Zimbabwe Governor, in his 31 January Monetary Policy Statement, issued a directive to mobile operators to review their charges by end of March 2013.
Here’s a breakdown of the new tariffs as advertised:
|Tariffs Effective 11 March 2013|
|Lower Value ($)||Upper Value ($)||Send Money Tarrif ($)||Cash Out Registered Tariff||Cash Out Unregistered Tariff|
The new tariffs are effective today. According to the adverts, the tariff reduction makes the service up to 34% cheaper. The marketing push for the review is that it makes EcoCash “better”, “simpler” and “cheaper”.
Here’s an image of the old tariffs which is still up on the Econet website:
As you may notice where, previously, tariffs where based on a percentage, now they are specific values for the 14 value ranges starting at $1 up to $500.
In terms of the actual percentage changes, transferring smaller amounts has actually become more expensive, while transferring larger amounts has become significantly cheaper. For example where transferring $1 used to cost 2 cents (2%), now it costs 9 cents (9%). In comparison, transferring a large amount of say $450, now costs less – $6 on old tariffs and now $4.49 (just 1%) on new tariffs.
While there is indication from other markets that most transactions are small value in the $1 – $35, we have no idea what size of transaction is the average locally. Depending on the answer to that question, EcoCash tariffs may actually have effectively increased.
Another key change with the adjusted tariffs is that where an EcoCash user used to pay more charges to transfer money to an unregistered user (7% in total), now they pay the same fees regardless of registration status of the recipient. Reciprocally, where an unregistered recipient used to withdraw cash for free, now they have to pay something; as much as 20% for small amounts and 2% for the larger amounts.
The tariff reduction is the second since launch in September 2011. The first was a reactive reduction soon after launch following sentiments that the launch tariffs were ridiculously high.
It’s not clear yet how all this affects agents in terms of commission. We’ll be posting more definitive data on the tariff review as we get the updates. Here are the adverts published in the local press: