Customers conducting EcoCash transactions under a tent recently at the Harare Agricultural Show
Econet announced today the introduction of a new EcoCash based mobile money service called EcoCash Save. The service offers a mobile virtual savings account for the subscriber in much the same way that EcoCash users have a virtual mobile wallet. The EcoCash Save account can be opened by any subscriber within seconds via a new EcoCash USSD menu option. Subscribers can do this from anywhere they are as they don’t need to visit an agent. Once the account is opened a user can immediately transfer money from their EcoCash wallet to the savings account.
This is a key difference of what so far we imagined an EcoCash savings account service would be. We imagined it would just be linked to a regular savings account with a bank and that Econet would negotiate rates with the bank based on the collective volumes of savings they bring. Such a linked account would mean the subscriber would still have some relationship with a traditional financial institution.
EcoCash Save is something more radical and more convenient to people looking for banking services. Yes, banking services, not mobile money services. This new virtual account is a bank account. One you can create on the fly from wherever you are and start depositing your savings into. If you have tried to open a regular savings account at a bank, you appreciate how big a deal this is. Econet has come in to replace savings accounts as we know them and this has a high chance it will work.
A high chance it will work that is especially as they are doing it with extras like interest of amounts as small as a dollar. The service may attract very small amounts as well as bigger ones. Easy to imagine a guy looking to save $50 a month considering EcoCash Save since, if he went to a regular bank and tried to save that $50 he’d know that months later the money would have all been eaten up by miscellaneous charges. Either that or he has to understand cryptic terms and conditions and special types of accounts to ensure the 50 at least stays put.
For Econet, paying interest just makes sense as money was being kept in the EcoCash wallet already by some subscribers anyway. The money in the wallets is underpinned by real dollars sitting somewhere (at Steward Bank or at the RBZ) and these dollars were so far already generating interest earnings for Econet. EcoCash Save just enables them to reward users for keeping their money like they would in a proper savings account.
The savings account opens up opportunity for EcoCash to launch even more services that so far have been the reserve of traditional financial institutions. Loans especially. And even the release today has a hint of that when you read that they are encouraging employers to start paying salaries into this savings account. Once a salary is being paid into an account, loans can be issued to that subscriber with enough confidence it won’t go bad. And again this doesn’t necessarily have to be the micro loans.