Zipcash, the money transfer services platform owned by local postal services Zimpost is handling over $4 million in transactions every month. This is according to a report in the Herald which carried information from Dr Douglas Zimbango, the Zimpost CEO.
Zipcash currently provides remittance services from South Africa, Botswana, Tanzania, Nigeria and Kenya. The service uses the International Financial System (IFS), which is an electronic platform curated by the Universal Postal Union (UPU) and is resident in every national postal network.
According to Zimbango, Zimpost is anticipating turnover for the financial year to exceed $16 million powered by the growth of Zipcash. This optimism and faith in Zipcash is also being influenced by the work being carried out by the Universal Postal Union to turn the International Financial System into a mobile platform.
A lot of the excitement around Zipcash seems justifiable. Not only is the service experiencing a steady growth, but there is still room for expansion as the service taps into the UPU’s global network of post offices.
Zipcash has the potential to offer remittance services from the highest number of countries, something that other local remittance players that now include mobile money entities like Telecash and EcoCash, have had to maneuver through partnerships with other service providers.
At the same time, Zipcash is a post office service, meaning that it has one of the better-placed agent networks in the country through the postal network. This also ties in with a strong brand presence and the element of trust that has been cultivated by the postal services.
There are also some issues that Zimpost will have to figure out to ensure that Zipcash has a chance to grow as a mobile money service.
For a while now Post Offices have been housing mobile money service providers like EcoCash and Telecash through in-house agents. According to Dr Zimbango, Zimpost has mandate to ensure financial inclusion which partly explains this arrangement. It seems more likely that these agents proved to be great tenants, offering Zimpost a chance to use latent resources.
But now that remittance services are a growth driver for the Post Office and there is the ambition to morph Zipcash intro a mobile service, these providers are competition. After all, they also offer remittance services which can be redeemed at mobile money agent posts.
Growing Zipcash won’t be easy as well. One of the unwritten plays in becoming a serious mobile money contender is building a brand name. This involves extensive marketing, product awareness and becoming visible everywhere. This is an expensive exercise, one that Zimpost will have to dedicate a lot of resources to.