At the company’s AGM recently Econet Wireless Zimbabwe explained to shareholders that the group is looking to services such as the mobile money service, EcoCash, for continued profitability and new value for shareholders. According to a report by local financial analysis email service, Financial Express, Econet Wireless Group Chief Operations Officer Tracy Mpofu said at the AGM that they would continue giving value back to shareholders even though the company was trading at a much lower Price-Earnings Ratio than other regional mobile operators.
“EcoCash is one such service and we have shown this by pushing through over a $1 bln worth of transactions since inception,” Financial Express quoted Roy Chimanikire the Econet Zimbabwe Deputy Finance Director. Econet also said, without sharing any specifics, that the numbers coming from the platform are exciting, confirming the service is still experiencing healthy growth.
A report released in July this year by the GSMA revealed that the service had grown to 2.3 million subscribers, with 1 million of those active monthly and transacting about $200m worth of value. In the same report Econet said that they considered interoperability with banks as crucial to the success of the platform. “Interoperability” in this case meaning on Econet’s terms and not the banks. The mobile operator has so far not let the local payments switching company owned by the banks, ZimSwitch, to fully operate its mobile banking platform on the Econet network.
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According to the Financial Express report of the AGM, asked about this lack of network neutrality, the Econet Zimbabwe Chief Executive Officer Douglas Mboweni responded: “There’s a huge misunderstanding in terms of the definition of a gateway. As Econet the gate is EcoCash. Therefore financial players who want to launch their MMT’s can use EcoCash as the platform. We allow banks to transact using EcoCash even launching their own MMT’s but on the same platform. It has the capacity”
We summarise that to mean that Econet will give access to anyone that wants to use EcoCash as a platform, but will not make its GSM network neutrally interoperable with systems of competing services such as those by bank switches like ZimSwitch. The basic message being: “Switch all you want with your traditional banking infrastructure, on mobile we are the new defacto payments switch”.
It’s with this new defacto-ness that Econet boldly promises a brighter future for shareholders. The company is currently pushing deliberately for the adoption of EcoCash for general merchant payments for shopping as well as bill payments. Users of the service (including this writer) are already able to pay for groceries at a number of supermarkets in the country using EcoCash. The option to use the mobile money service to pay bills has also been available for some months now.
Information in the market also suggests Econet is working on other services including Econet Farmer, an attempt at an eSoko of sorts, set to be launched in coming weeks, and Econet Education which so far we are told will make it easier for students to access learning material, and possibly pay for it, via mobile.
8 thoughts on “Econet Zimbabwe banks on EcoCash mobile money to create shareholder value”
I’m an Econet subscriber and am on Ecocash because of this ”defactoness”. My bank is not yet intergrated with Ecocash and has its own mobile money service, as such, integration with Ecocash is unlikely. However, I’m not pleased with Econets patronising stance. Why wont they allow banks to use their network for banks mobile money services? It is this restriction and cockiness that’s gonna cost Econet as a brand going forward. It is my hope that Potraz will soon allow number porting and that my bank and other banks realise that they cant be bullied by Econet any longer. Banks should conduct a baseline study to establish mobile OS ”penetration” levels in Zimbabwe, after which, all banks or the big 4 (excluding CBZ coz its already on Ecocash) pool resources to local or international Android,IOS & Windows phone app developers to create a multipurpose app available on the app stores that is similar to the FNB,ABSA & Standard Bank apps available in SA. At the end of the day, mobile is moving to an era of apps and banks shouldn’t be left out as they were the first time around regarding mobile money. Personally, the USSD experience used on Ecocash is DRAG! A seamless app with seamless mobile banking and mobile money functionality would be ideal.
If only banks would wake and be proactive and not reactive, after all, this will ultimately benefit us the consumers!
The problem for the banks is that they already have some reasonable access to those people with smartphones. The war is for the unbanked and usually these don’t have smartphones. smartphones still account for a tiny fraction of all mobile users and this will stay so for a couple more years.
A lot is said about the unbanked, which is pretty sizable i’m sure, but I think it would be for the whole industry’s benefit if a baseline study into the details of those who use mobile money transfer. Surely a great deal of those who are already banked contribute a sizeable amount of mobile money transactions. At least if we have empirical figures/research to refer to, we’d all be in the clear and able to work towards improving the services provided to us the consumers.
I like the Mboweni’s attempt to respond. Econet has agreed to allow banks to connect via the Ecocash engine with punitive terms. You can transfer money from your bank to Ecocash (PULL) fair and fine, but you cant transfer from Ecocash to your bank (PUSH). Put shortly the linkage with banks at these terms is meant to siphon money out of banks but will not share the Ecocash, unbanked cake. May someone please define unfair competition for me.
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