The Zimbabwean government has directed all public institutions including State-owned enterprises and local authorities to introduce electronic Point of Sale terminals by the 1st of July 2016.
This is expected to ease the challenges being faced with the current cash crisis that has gripped the country.
It also follows the Reserve Bank of Zimbabwe’s announcement on the reduction of bank charges that have lowered the cost of POS transactions to between 10 cents and 45 cents per transaction.
The directive is a bit of a no-brainer and long overdue, something that is clear with the way some authorities like the City of Harare and the City of Gweru, as well as some government services have already introduced POS terminals to ensure service continuity.
At the same time, the directive doesn’t seem to cater for the realities of the market. The RBZ in its latest monetary policy highlighted how POS transactions only accounted for 5.64% of transactional volumes.
With a largely informal economy, mobile money services, which handle the majority of transactions(88%) should be the alternative that all departments are forced to adopt.
It should be noted, though, that for that adoption to work, it would have to be for all service providers, including the dominant private services like EcoCash, and not just the State-owned OneWallet which is the least relevant mobile money service.
That move was tried for ZESA prepaid tokens and it doesn’t look like it has helped anyone, including NetOne’s OneWallet.
The government should issue directives that genuinely solve problems and address the reality of any situation. Right now the reality is that mobile money is more relevant than cards.