So there I was, going through vPayments merchant application forms I got from CABS. You may be interested to know that among entities CABS does not offer VPayments to, or does not allow to use “CABS VPayments” are sole traders, churches, trusts, partnerships, associations, non-governmental organizations, private business corporations, co-operatives, government departments, the government itself, hospitals, local authorities, Zimra, and virtually anyone not registered as a company; anyone not incorporated as a company cannot register for an e-merchant account for VPayments at CABS. CABS’ VPayments contract is specifically designed for companies. Among the requirements for e-merchant status is information about title deeds. I’m tellin’ ya, title deeds!
(I leave VPayments issues for another article. I call it “CABS VPayments” because to get VPayments I went to CABS and it is from the information I got from them that I write about VPayments in this article hence “CABS VPayments”. Perhaps at other banks they will welcome other types of businesses apart from companies.)
MasterCard to the rescue
Like I said some time ago in one of my TechZim articles (see: Comviva to give ecommerce jetpacks), MTN Mobile Money uses Comviva and MTN Mobile Money customers have the option to get a MasterCard. Like MTN Mobile Money, EcoCash is powered by Comviva.
In March 2013, EcoCash unveiled its virtual debit card for EcoCash users. In a press statement, Econet said it had “already started rolling out 10,000 terminals across the country that will not only accept the EcoCash Debit Card, but also any of the traditional credit cards such as American Express, Visa, MasterCard, including those issued by local banks.”
Instead of all of us wasting time crying for access to VPayments, for the little guy who cannot afford to rent an office or does not need to, and churches that want to use VPayments to collect tithes etc., we can all forget about CABS VPayments (if you are not a company, after all that’s what you must do unless you register a company) and wait for Econet Wireless Services to complete rolling out their system and hope that eventually, like MTN Mobile Money, they take up the Comviva-MasterCard initiative; the MasterCard Mobile Money Partnership.
Through the MasterCard Mobile Money Partnership, you will be able to use your EcoCash wallet wherever MasterCard is accepted with the option to have a prepaid MasterCard that you can also use wherever MasterCard is accepted.
This would put MasterCards in the hands of many unbanked and previously unbanked Zimbabweans, bringing development to all tuckshop owners, small businesses and bedroom entrepreneurs across the country. I am talking of about a potential 2 million plus MasterCards within Zimbabwe, over 2 million MasterCards that can make payments online. If Econet Wireless Services does that, which I hope it will, that would be millions more new potential Zimbabwean customers for Zimbabwean online businesses.
CABS, VPayments, and the competition
EcoCash has more customers than our exclusive companies-only “CABS VPayments”.
EcoCash has more customers than ZimSwitch has of cardholders.
For me to accept payments from EcoCash customers, even if Econet Wireless Services does not start its own online payments system of the type of PayPal, so long as it rolls out MasterCards, I can accept MasterCard payments online without VPayments and without a problem.
One very simple illustration is this. I create a 2checkout.com vendor account and automatically I can accept credit card payments, including EcoCash “MasterCard” payments, right from Zimbabwe.
Anyone with a MasterCard, whether from FBC or EcoCash or Steward Bank, whatever the case maybe, will be able to buy from my 2checkout.com-integrated website using his/her MasterCard or EcoCash. No need for a Zimswitch card or Zimswitch VPayments that has major requirements, and to use movie language, needs “level 6 clearance” for me to use.
And while with Textacash you pay $1 to open the account, you can register for EcoCash for free and you need to load a minimum of US$5. (You can also now load a prepaid FBC MasterCard with a minimum of $10 and use it to pay online.)
First open a VPayments account
And why go on the Zimswitch website to open a VPayments account when I can just get an “EcoCash” MasterCard that’s widely accepted and start transacting online? That’s one question your customers will ask themselves and ask you the website owner!
Why can’t I just pay with a Zimswitch card the same way I can pay on any other website using a MasterCard for example? Where PayPal is accepted, you can pay using either your PayPal account or your card without logging into PayPal.
VPayments has serious competition in the form of the Mastercard Mobile Money Partnership.
Another thing is you have to educate your customers about vPayments first before they can buy from your website using vPayments and how it works. And who do you think will tell them that: Zimswitch? And just when was the last time you saw a Zimswitch vPayments ad? I have never seen one, and not even in Google sponsored-ad results. I even searched for them in Facebook and found a page with only 4 likes!
I gatta say it sounds like a joke but it ain’t. Zimbabweans cannot directly create PayPal accounts, yet if you Google online payment processing from Zimbabwe, PayPal comes up in (paid) sponsored-ad results, but not vPayments. And then you expect vPayments to send how many customers to your website? As part of your own marketing budget, you will have to allocate a huge portion to advertise vPayments on behalf of Zimswitch in your own interest. I understand EcoCash merchants advertise EcoCash too, but unlike Zimswitch, Econet Wireless Services itself heavily advertises EcoCash and sends customers to EcoCash merchants.
EcoCash online payments
Anyway, since TechZim reported that EcoCash is working on APIs for online payments, you can also sit back and relax and wait for EcoCash online payments. When the EcoCash online payments system is live, without a doubt it will be able to at least process EcoCash payments, if not MasterCard and Visa cards as well. (Remember what EcoCash said about its terminals above – “not only accept the EcoCash Debit Card, but also any of the traditional credit cards such as American Express, Visa, MasterCard, including those issued by local banks”. That means you will completely not have to worry about having a Zimswitch vPayments merchant account anymore. (Right now vPayments does not process MasterCards and Visa cards.)
vPayments by-pass surgery
Anyone who has a Zimswitch-enabled bank account will be able to transfer money from her Zimswitch-enabled bank account into her EcoCash wallet so long as her bank is connected to both EcoCash and Zimswitch, with the option of not even using Zimswitch vPayments or a Zimswitch card at all for online payments.
Let’s take the case of CBZ. Already someone who banks with CBZ can move money between her Zimswitch-enabled account and her EcoCash wallet. That means she can electronically move money from her Zimswitch-enabled bank account into her EcoCash wallet or (and then to) EcoCash MasterCard, which she can then use to make payments online, either as EcoCash or EcoCash MasterCard stored-value. She can even buy from your website that uses 2checkout.com to process Visa and MasterCard payments. No unnecessarily drastic vPayments merchant registration requirements to comply with and no vPayments integration or Zimswitch card necessary.
Competition is good
So at the end of the day, if EcoCash takes up the “Comviva-MasterCard” Mobile Money Partnership initiative, MasterCard will displace the need for vPayments (both for card processing and for customers) and the little guy and marginalized “non-company” merchants, the CABS vPayments reject, will win, big time, from a global pool of MasterCard users and a wide range of experienced online payments processors
It means small local online businesses, virtual pure plays, start-ups, including one-lady bands operating from a dorm room a la Facebook, will be able to process online payments from local customers on their websites (just like in the United States) and local customers will have a way to pay that is completely independent of Zimswitch, Zimswitch cards, and vPayments.
In other words, local e-commerce will be able to work without Zimswitch vPayments. This will also see some of the money in the informal sector pass through the EcoCash payments processing system for local e-commerce payments. In other words, the formal sector, read EcoCash, will process payments for online informal sector trade. By official Zimbabwean definitions (vpayments may not be for everyone), dorm room entrepreneurs and eBay individual sellers are in the informal sector, and those who sell on eBay from their houses are informally employed.
The vast “bottom of the pyramid” merchants who are currently being denied the use of vPayments will be able to conduct business online through automated transaction processing made possible by or through EcoCash and/or external payment gateways.
It also means that these marginalised merchants and EcoCash will be able to make money from a portion of the US$2,5 billion or so we hear is circulating in the informal sector that will pass through EcoCash for online payments. Before PayPal, the US had cash, cheques, and wire transfers, but when PayPal came along, part of US commerce shifted from using those manual payment methods to using PayPal which is automated and instant. In fact, new businesses came into existence thanks to PayPal. Some of the big businesses we have today even started out accepting payments through PayPal.
Customers who don’t qualify for traditional bank accounts a la Zimswitch will also be able to buy from your website making payments using EcoCash or their EcoCash MasterCards which they can load with money at any EcoCash agency.
And if the payment processing is done by EcoCash, EcoCash will make money from transaction fees from these customers and merchants who are not welcome to use vPayments, let’s just say at one bank.
Words of advice to CABS and Zimswitch
There is US$2,5 billion that is said to be circulating in the informal sector, and already much of that money is now passing through EcoCash, and now to Steward Bank which did not even exist a few years ago when you did. In other words, EcoCash is charging the informal sector transaction fees as (part of) that US$2,5 billion passes through EcoCash as it circulates.
A huge chunk of that informal sector money is certainly going to be diverted to EcoCash and ultimately to Steward Bank through payments to local ecommerce websites and non-companies that you don’t want to do business with.
When that day comes, and like hell it will, when that money starts going to EcoCash and Steward Bank, dear Zimswitch and CABS, I hope not to hear you making noises, protesting the use of PayPal or other payments systems by locals. One day, sooner or later, PayPal is going to come. In the meantime you are positioning yourselves for defeat.
(I, of course, don’t have to tell you that a bank may rise up in Zimbabwe, and out of nowhere do away with bank transaction fees altogether, turning the whole banking industry upside down. Why? Because it will be making more transaction fees elsewhere than through ordinary banking transaction fees. But then again I am just saying it for the readers.)
Conclusion
If Zimswitch does not catch up with the times, and does not start processing MasterCard and Visa payments soon, it might become irrelevant and join eTranzact, except maybe should the Zimbabwean dollar return and/or EcoCash has mercy and integrates with Zimswitch. (I do hope VPayments will start processing MasterCards and Visa cards soon otherwise they might be overtaken by events.) eTranzact had its own card and mobile money transfer system and even processed Mastercards and VISA. It was even in the mobile payments game long before M-Pesa but look where they are now.
Have you seen eTranzact lately? In Zimbabwe?
eTranzact was a payment processor that did pretty much what vPayments is doing using a similar model. You needed a bank account at a partner bank like Kingdom Bank. Anyway, retailers like OK and TM did not open online stores just because a payment processor, eTranzact, was here.
PayPal started with the “bottom of the pyramid” just like EcoCash, serving peer to peer payments and eBay sellers and buyers, but unlike CABS vPayments, PayPal was open to everyone to do business with, and not just Walmart with the whole of Zimbabwe just customers of the likes of “Harare-only” companies like Umax. vPayments has no network effect whatsoever to drive mass adoption, let alone the advertising budget if what I have seen so far is anything to go by.
It is obvious, and without a doubt, that EcoCash and MasterCard, and not Zimswitch cards and vPayments, will ignite ecommerce in Zimbabwe.
This guest article was authored by Prosper Chikomo, the author of Turning Iron into Gold: Golden Opportunities: How to Spot Them, Create Them, Make Money from Them, and How Not to Miss Them.
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32 comments
Amazing article. I enjoy the convenience of VISA and EcoCash. vPayment is super restricted… Who uses online payments in Zim anyway??
People do actually. Don’t know if you read about Pay4App on Techzim, a lot of my friends buy Africom bundles with EcoCash on the internet from there.
TechZim did a less silly article than this one a few weeks ago about all the many online stores available to Zimbabweans – come here much? Gods, do you even lift?
I bet you were waiting all your life to use that phrase…
reads like an ecocash advert
Again ! Techzim we are so fed up of your biased reporting. Applaud Vpayments as a local initiative and support it. The people developing it do not have vast development budgets or for that matter marketing budgets.
and banks complain about ecocash, title deeds? really? these people need to improve their conditions otherwise competitors will blow them out of relevance
vpayments lost it from the start
Ecocash is the future. If you don’t join in, wanyura. Period.
Well thats your opinion and not fact.Please editor avoid articles where someone is marketing for someone here.Let him talk about a topic but let us conclude.This is serious bias indeed.
This could have been summarized as a paid advert by Mobile Master Card on your website Mr.Kabweza.
i still think techzim should tag these ‘opinion’ articles.
>Zvekushopera izvi zvoda ana Makandiwa nana TB. EcoCash yacho haisati yakuita zviri kutaurwa pa article pano.
The tone of the article also screams ‘vPayments wronged me so everything vPayments is Bull****’
This article is unacceptable, The writer should not just attack other people’s work like that. Mr Soul Kabweza please do something about this article. I dont agree with this writer, why should Econet rely on foreign partners and technologies always, look at these technologies they are importing from Comviva, MasterCard, Huawei, ZTE etc, that makes their platform expensive to operate and maintain, its high time that we create and develop our systems and technologies
“The writer should not attack people’s work like that.”
“why should Econet rely on foreign partners and technologies always.” – Unbiased, I agree.
E-commerce must be open to anyone and everyone, without bias, and in this case it is obvious vPayments merchant status is exclusive and restrictive. Why should it only be for big box retailers? Several inaccurate announcements were made about vPayments
service, like that is it like PayPal, which it is not.
“Mr Kabweza please do something about this article. I don’t agree with this writer,“ – Unbiased.
Sometimes importing can be cheaper as i have seen in the clothing industry.If there is a a local ZTE or Huawei initiative i would love to read about it on Techzim.
I take full responsibility for what I said. Zimswitch and CABS must be told the truth so that they respond accordingly to the needs of the markets that want to be served by them and if they are not interested, those who cannot be served by them will be informed of other and even competing options. If they don’t want to do anything about it they must not say we never told them or warned them. I
love CABS, and I love CABS too much, maybe that’s why. I want my bank to win!But when it does things like this …
Anyone who cannot use vPayments for any reason is free to look up to its competitors and to explore alternatives.
Bankers I have talked to are suspicious of ecommerce merchants, so how should I know, maybe CABS is doing that to protect the public by signing on brick and mortar businesses. But it’s at the expense of some publics who can forget about vPayments.
“local ZTE or Huawei initiative” should read ” local ZTE or Huawei COMPETITOR OR SUBSTITUTE”
Hmm this article is more about the CABS merchant signup process than VPayments itself… Did you bother to try an enquire with any of the other banks about their merchant signup process??
From the
information I have, only CABS has been given the go ahead by the RBZ. I went to
FBC and they did not even know about it. At CBZ and POSB … let me not say.
Trust Bank is no longer on Zimswitch as the papers reported. It’s really
boring. Honestly, anyone who cannot meet CABS requirements can sit back and
relax and wait; for other banks and competing services. And they will come.
Competition is inevitable.
In spite of the howls of protests coming from others I do agree with the author on so many points. Look guys – if the process of someone signing up to use your service costs them too much time and so many papers then you need to wake the f*** up coz this aint the 90s anymore. Convenience is the new driver of consumer products and not anything else. VPayments is dead in the water. Whilst EcoCash is no angel, I will gladly take it up any day for the convenience it brings. Coz of EcoCash I last went to the bank months ago and I have forgotten how it feels to queue up for DSTV payments. So after this do you think I want to dig up my title deeds just to sign up for a service that hopes to work at some point in the future……….no ways
I have a bank account too and have not been to a banking hall since I can remember now thanks to mobile banking (not EcoCash) and can pay all my bills not just DSTV but City Of Harare, ZESA… And as I said before, the signup process does not reflect VPayments but more the bank’s own process to become a merchant.
Have any of you actually signed up to VPayments before slating it?? Took me 2s, enter my details including card number, they send a random debit and ask for confirmation of the amount, enter the amount and then done.
Now when I make a payment I dont need to enter my card information (not secure) onto a website, just log into my account and click pay!
Its all good and well to theorise about what the EcoCash solution MAY be when (if) they release an online payment solution.
Is the CABS vpayments signup process too restrictive… most definitely, and this needs to be addressed by someone or some other bank. But comparing it to a non existant product is a bit of a stretch.
The banks are governed by rules set by the reserve bank, for example the using of foreign payment systems is illegal here last I heard, unless they can pay into your local bank account and not hide the money off shore where Zimra cant get to it. One reason why big corporates cant use things like PayPal etc here, its a legal nightmare they dont want to get involved in.
I ahve an EcoCash merchant account and that was jsut as much of a headache to aquire as a bank’s merchant account. Using a normal EcoCash account wasnt an option due to volume restrictions and cost.
We need a Zim solution suitable for the small to medium enterprise, so far I dont know of one and till I see something definite from EcoCash I am reserving judgement.
I couldn’t agree more. In the precursor to this article I saw some readers mumbling about Pay For app or however that’s spelt saying they were earning on their websites using EcoCash. So I did some looking around not expecting much. Truth is, some things you have to see to believe. the eCommerce boom is here and EcoCash just feels natural. I made one sale today (yay). Not much by any measure but I like how I never got a “how does this EcoCash online work?” question. Amazing adoption by our market. I tried vPayments hoping I’d get a simple solution but they had me conclude a lay man can’t earn online.
Also take note, a top person in the EcoCash team who I bet is also on the eCommerce programme sided with ZimSwitch’s current setup and left me in steam when the meeting concluded so let’s not get our hopes just yet.
“I made one sale
today”
You just provoked
me to say it.
I got my first EcoCash payment within 30 minutes
of going live! I was very excited as it was my first payment through a local payment method! I took some time to celebrate.
*SSSHHH SSSSSHHHHH*
Maybe, just maybe. Since ZimSwitch isn’t singly owned and is a collaborative brainchild we just can’t expect too much of a narrowed focus from them. Takes a startup whose only mandate day & night is online payments to really bring something that caters the accountant who wants out of the system to an eCommerce behemoth all in one package.
No, really. Look at this copy from their website. Lorem Ipsum stuff. http://www.zimswitch.co.zw/news/3
”
Listed below are some of the benefits of the ZimSwitch platform to the financial sector, business and the Zimbabwean public. Maecenas sollicitudin, urna sit amet tristique euismod, tellus orci malesuada sapien, ut volutpat ante augue interdum leo. Ut neque massa, lacinia et consectetur ac, sodales ac risus. Proin ullamcorper, elit sit amet pulvinar aliquet, tellus ipsum dapibus ipsum, a tristique ligula leo sit amet tellus.”
To me, this reads like a venting and criticism by the author – I hope that his silly style does not get in the way of a relevant message he has to offer (IMHO) being that Zimbabwean merchants NEED to learn to get online NOW- you are late to the party. Ignore the “I hate CABS, I hate vpayments” message – hear what is relevant: get connected! Get online! (Find your title deeds! – almost funny) If you wait for mastercard and visa and amex and and… to come rescue you then you are in trouble – because those companies are about making and taking money – yours…
And please dont get caught up in some rage article comparing ecocash to zippit, or textacash, or vpayments (or is it both?) – go find out for yourself the facts! It will take a few milliseconds of Google search time.
Thanks,
Cold
=================================================================
The foundation for this whole article is wrong. I have a copy of the CABS merchant agreement and the only restrictions are that the applicant must comply with RBZ KYC requirements, must have a CABS account for payments to be settled in to and must comply with the laws of Zimbabwe.
I have all the documents, all of them, all in all i thing they are 4 documents i got. Cabs and Old Mutual Services etc. I did not just get “a copy”. I know what i am talking about.
If you know want you are
talking about then surely you should know that you don’t need a $1 to open a
TextaCash Account.
As a matter of fact it does. And i write from experience. When you are told to deposit money into the textacash account that’s a cost of opening the account. You dont just get an account and the card for free. I know what i am talking about.
I think this article is highly speculative giving EcoCash a lot of credit for things they have neither done nor plan to do. Vpayments has a e-commerce API whilst EcoCash does not. The Pay4App guys had to go out of their way to write their own platform first which provides no guarantees of future compatibility or availability. Despite the large number of EcoCash subscribers what fraction of them is going to get a MasterCard solely for the purposes of purchasing online realistically speaking? You need to write balanced and fair articles, there is an obvious bias of your article in favour of EcoCash.
I am looking forward to a day when we will have 100% Zimbabwean solutions for Zimbabwean challenges.
Many thanks to Techzim for this platform to open up debate on the technological, social and financial issues Zim is facing.
As a tip, why don’t we have a conference/workshop where we bring on board mobile network operators, financial institutions, POTRAZ, techno savvy individuals, `online editors’ etc and interrogate ourselves so that we come up will inclusive solutions which will take our country to the next level.
As the world moves forward, some still argue. Some people thot they would never need, let alone ever own a cellphone , now Gogo vatonayowo. Same same nema master card ayaeEcocash . Banks are over-rated as they lack imagination and lose sight of what draws people to a service … convenience offered by the service . I reserve my bias for pioneers not whiners. Banking institutions grow up.