After years of criticism and the creation of an uncomfortable situation that was amplified by the country’s cash crisis the Reserve Bank of Zimbabwe announced a new set of bank charges.
The move is commedable and even though it’s far from the financial services charges utopia that most Zimbabweans have called for (ATM withdrawals still cost up to $2.50), its the first indication that policy can ease some of the challenges we face.
It also shows that as the regulator, the Reserve Bank can and should also review mobile money tariffs.
The assumption was that the as the high cost of electronic transactions has been highlighted as a barrier to a “cashless society”, the charges for sending, receiving and cashing out money from mobile money wallets would also immediately come under review. That is yet to happen.
To put the costs into perspective, it costs $2.55 for a $100 cashout and as much as $4.55 to cash out $500 from a mobile money wallet – figures that now exceed the $2.50 ceiling set for ATM withdrawals.
Mobile money services have a wider footprint than traditional banking services and a reduction of mobile money tariffs would impact a larger segment of the population.
According to a FinScope survey published in 2015, only 30% of the Zimbabwean adult population had an active bank account. Of the 70% of the market that was unbanked, 74% dismissed a bank account as being unnecessary or unaffordable.
This is contrast with mobile financial services that had registered over 7,3 million users by December 2015. All these users depend on the ubiquity of mobile money services to pay for services as well as send and receive money from people within the country and outside it.
A national count of over 33,000 agents also means that mobile financial services are the “banks” that most Zimbabweans are familiar with and turn to for most of their transactions – something also supported by official figures which show that 88% of transactions are made through mobile money.
Understandably these changes won’t happen at the snap of a finger. The RBZ still has to work with mobile money service providers, who are predominantly the mobile network operators.
Despite isolated and applaudable efforts to lower or scrap some of their charges, mobile operators are likely to resiste any massive reduction on fees.
As the mobile telecoms revenue model adapt to changes like falling income from traditional pillars like voice and SMS, mobile financial services have offered a glimmer of hope with their growth potential.
All this has been enabled by investments which have included network support, service develeopment, wider agent networks and service awareness camapigns which have made mobile financial services the success that it is.
Blindly hacking down tariffs would affect a recovery on such an investment, so the RBZ would need to factor that into its tariff review.
In any case though, these considerations should have made already, especially as the bank charges review was being intensely debated as a cash crisis solution.
Mobile money tariffs also need to be considered, for the sake of the millions who are paying them everyday.
2 comments
hahahaha wait you want econet to shoot don its cash cow. not gonna happen easy. yeah they all we care about the client but as it stands revenues are low and econet shouldnt take a hit.
Standard Chartered have just moved their cash from the ATM’s to the bank so you have to pay the 1.75% fee inside.. being $5.25 per $300 instead of $2.50.
They say they do not have enough cash for the ATM’s but for the last 8 weeks they were only putting cash in the ATM and refusing to give it out in the banks. It is sad when so many institutes are only thinking of how much money they can make from the cash situation.