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The EcoCash mobile payments strategy and numbers: a case study by GSMA

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ecocash-agentRecently, the GSM Association released a case study report they did on EcoCash this year. The case study focuses on EcoCash’s rapid uptake since launch in September 2011 with a look at how the company has managed to register 2.3 million Zimbabweans in under two years. It also looks at the strategy going forward as EcoCash evolves from just a money transfer service to a payments solution.

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The report, titled “Big ambition meets effective execution: How EcoCash is altering Zimbabwe’s financial landscape“, also provides some new statistics not released before on what Econet spent to drive EcoCash usage, the new company’s (Econet Services that is) organisation structure, staffing & execution strategy, and other things.

The subscriber and usage numbers are an update from the last released by the company in May when it published its annual results. The number of subscribers for example, you will notice has increased by 200,000 from the 2.1 million announced then.

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Here are some main points from the report:

Subscribers & the money

  • Econet has registered 31% percentage of Zimbabwe’s adults since launch. The number of registered subscribers outnumbers all of Zimbabwe’s bank accounts combined.
  • Over 1 million of these accounts are active and push US$200 million of volume over the EcoCash platform every month.
  • Remember those EcoCash people in the streets that would register you and have your airtime credited with a dollar? According to the report, they accounted for approximately 75% of EcoCash subscribers. As brand ambassadors, they were expected to bring in 25–30 subscribers per day.
  • Over 2 million dollars in airtime was spent as registration bonuses to new subscriber
  • Econet now has 4,000 EcoCash agents, and a subscriber:agent ratio of 250–600 active subscribers per agent.
  • Of the 5 integrated banks, EcoCash registers approximately 200 customers per bank each month. These bank customers transfer an average $145 a month between their bank accounts and EcoCash wallets.
  • EcoCash is now doing $200 million in monthly EcoCash transactions. When annualised this volume represents an amount equivalent to 22% of Zimbabwe’s GDP.

The strategy

  • EcoCash is paying out 80% of revenues in the form of agent commissions to build a strong and committed agent network.
  • Despite the large user numbers, senior management does not expect EcoCash to break even until three years after launch.
  • The domestic P2P business was purposefully designed with thin margins. EcoCash plans to recoup its investment from what it sees as a larger and more profitable ecosystem built around banks and retailers. The P2P transfers are therefore just a first step towards a much bigger goal: becoming the dominant payment system in Zimbabwe for the banked and unbanked alike.
  • Econet now looks to change the perception that EcoCash is just a P2P money transfer service and convince the market to see EcoCash as the main financial tool in their daily lives. Hence “Live life the EcoCash way”

EcoCash Debit Card
The report has some very interesting information on the challenges Econet faces in its effort to make mobile phones the instinctive ‘cash’ that people reach for to make payments. Merchants, for example may question why they should pay a fee to accept a payment when they currently don’t with real cash.  Econet’s task is therefore to show that it’s actually cheaper to pay a fee than to handle cash. Another challenge is that subscribers are not keeping money in their wallets which means that they have to deliberately load their wallets in order to have enough balance for retail payments. Living life the EcoCash way therefore means having money ready in the wallet to use for anything a person needs to buy.

In mentioning challenges and possible solutions, the are some things the report missed. The first is how EcoCash has been viewed as “too expensive” and how this has actually worked against its adoption. The typical response we get when we casually ask people why they didn’t use EcoCash to move money or make a payment, the response is almost always that EcoCash is too expensive. Even though Econet has moved to correct this by lowering fees, that tag is yet to go away.

The second challenge not mentioned is that EcoCash has had a less than friendly relationship on some occasions with some major banks in the country. This is noteworthy because the report says Econet recognizes that full interoperability with Zimbabwe’s banks is crucial to its success as there is significant money flow between banked and unbanked families.

You can download the full report here.


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24 thoughts on “The EcoCash mobile payments strategy and numbers: a case study by GSMA

  1. Well done EcoCash! You are putting us on the map. This is good for the country at least people out there can say something different about Zimbabwe. I have some concerns regarding some negativity from the writer. If you say its expensive what are you comparing EcoCash with. If you are in Checheche and you want to send money to Gokwe what options do you have, how much will it take and how long will it take. I think the cost is relative in my view. When you say cost is affecting adoption how to you explain the fact that EcoCash has more customers than all banks in Zimbabwe combined after 20 months of operation. These banks have been in Zimbabwe since 1900! EcoCash has bank integrations with 5 banks (I am not happy that my banks Stanchart and Barclays are not integrated) and also more than 10 banks are EcoCash agents. How many banks has Mpesa integrated with since its launch 7 years ago. Lets compare apples with apples boss. It would be good if you can detail that information for us please. Is this a hostile relationship. I think banks are the ones who are insecure here. they need to innovate and compete. thank you EcoCash. We waiting for more!

    1. The banks are not insecure but they are rightly concerned about where the funds are being held and is this inside or outside of the regulatory system. Ecocash are not regulated by RBZ or by Potraz. Who is holding them accountable?

  2. Its still too expensive, I guess someone has to pay for the bloated marketing cost. There are other options which are way cheaper available countrywide to places even beyond Checheche. There is TextaCa$h from CABS, 1) they only charge the sender and not both the sender and the receiver 2) the charge is only 1% +20 cents for both registered and unregistered clients. 3) it offers banking functions (get money from any Zimswitch ATM, swipe in shops on any bank’s swipe machine, send and receive money from other Banks in Zimbabwe at the lowest banking charges in the country) TextaCa$h is not just a virtual wallet its a proper bank account with virtual wallet funtions since CABS is a registered bank (PS all u need is an ID to open this account plus it has no bank charges)

    1. Yes, Ecocash is expensive, but TextaCaSh is just not in the same league as Ecocash, as it is obviously not as ubiquitous as Ecocash where one only needs to get to the next Ecocash agent around the corner throughout the country using any mobile number.

    2. those very banking functions you want to try and use to paint good of TextaCash are the reason why its beaten by EcoCash, Who wants to be limited to the handful of CABS ATMs or Banking Halls, they want the convenience of sending cash to Nyatate in Nyanga without worrying about Gogo rising at 4am to catch the only daily bus to Nyanga town to withdraw, never mind the transport back home. There is EcoCash at the shops 5min scotch-cart ride. Build an agent network then we start talking. Don’t talk about ZImswitch POS outlets; those are still beaten by EcoCash agents in number and speed. And who wants to get into OK and be told to ‘buy something if you want cash’

      And who cares about whether its a Virtual Wallet or a real Wallet with virtual wallet functions. its not like one can walk to a CABS window and peep inside to see their ‘real wallet’ – it’s all virtual.

      What about convenience then. Are u able to pay City Council or restore your DSTV account from comfort of your home?

      1. Its not only in CABS banking halls, TextaCash has a agents countywide and in the most remote of places. and yes u can pay your DStv, City of Harare, Zesa Postpaid bills from your phone. Ontop of being able to do banking funtions from your phone on any network, u can also the send receive money to any network country wide at TextaCash agents countrywide and also at CABS branches countrywide

    3. You almost persuaded me to agree with you on TextaCash, but are you also ignorant of this fact that you would still need to find your way to access the service in towns, do we have CABS in every corner of the country. I would say Ecocash Agents make life more convenient with Ecocash than your TextaCash.

      1. Its not only in CABS banking halls, TextaCash has a agents countywide and in the most remote of places. and yes u can pay your DStv, City of Harare, Zesa Postpaid bills from your phone. On top of being able to do banking functions from your phone on any network, u can also send receive money to any network at TextaCash agents countrywide and also at CABS branches countrywide

    1. Hey there. I like the idea behind Zim Inov8. A general techie chat platform indeed is long overdue. But why not a friendlier url?

  3. Just to point out that Textacash does have an Agent network. I have seen them where there is no CABS bank – like Nyanga which is mentioned here. maybe not as many as ecocash, but they have float so you can get your money when you need it. Also it is too difficult to buy things with ecocash – much easier just to use your Textacash card on a zimswitch machine – most shops have them.

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