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#Mobile Money

Traditional banking model challenged as mobile money & internet payments increase

RBZ, Central bank Zimbabwe, Zimbawean Financial Institutions

Like every other national economic indicator posted this year, the latest monthly economic review from the Reserve Bank of Zimbabwe has displayed the strains that the national economy is facing. However alternative channels of payment seem to be rallying.

While the month on month inflation rate moved from 0.06% to -0.31% and year-on-year inflation for August 2015 stood at -2.77% which was the same as last month, other areas such as payments noticed some positive change particularly through increases in card, mobile and internet based payments in the month.

Card based increases rose from $487 million in the month of July to $506,6 million. At the same time the total value of mobile and internet based transactions rose from US$519.7 million in July to US$524.8 million in August.


The total in cheque transactions declined from US$12.6 million in July 2015, to US$11.4 million in August and RTGS payments dropped by 18% to end the month of August on a US$3.3 billion total. The volume of transactions also waned by 23.1% from 199,101 to 153,133 over the review period.

When compared against a similar set of figures last year, there are similar signs of reduced monetary movement across some “traditional” channels.

In August 2014, RTGS payments stood at $3,5 billion, having fallen by 11% from $3,9 billion in July of the same year. This means that the $3,3 billion for August 2015 RTGS payments is notably lower than last year’s figure. Last year’s July-August movement for cheque transactions also registered a decline, moving from $11,7 million to $9,4 million.

Card transactions stood at US$409.3 million in August 2014, which is lower than the $506 million for August 2015 and the $524 million mobile and transactions total for August 2015 is higher than the US$423.6 million registered in August 2014.

The patterns that are forming from these changes in payment channel use all seem to point to the way the average Zimbabwean is conducting more transactions outside traditional banking channels.

The role of the bank has been challenged by mobile money alternatives. Financial service providers and service deliverers seeking payment convenience for their clients are now tailoring their solutions to incorporate mobile money, something which has seen online payments also taping on mobile money options.

The same shift has also been taking place around card payment options. Options like debit cards that have a mobile money base like the alternatives from Econet and Telecel all represent this shift.

While the month on month changes might seem subtle, there is a clear indication that in our largely informal economy payments is continually going to involve less of the old banking model and service structure.

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