At the recent Mobile Money & Digital Payments Conference held in Harare, one of the issues raised by the bankers was the prohibitive costs of e-payments infrastructure like POS terminals and Automated Teller Machines (ATMs).
During a panel discussion sat in on by Lance Mambondiyani (Steward Bank CEO), Admore Kandlela (CEO of POSB) and Tawanda Matembo (Divisional Director, CBZ), Matembo spelled out some of the costs of payments infrastructure.
To buy ATM banks have to pay at least $31,000 while POS terminals cost about $500. These figures are excluding the duties that banks still have to meet as part of ZIMRA’s import regulations on this equipment. Matembo appealed to the regulator to assist the banks with this issue.
The central bank has to play a bigger role
For the greater part of 2016 a cash crisis in Zimbabwe has affected service providers in the financial service space and the regulator, the Reserve Bank, has been an evangelist of e-payments as one of the stop-gap measures and ways of creating a cashless society.
It engaged payments services providers in the hammering out a new set of tariffs for financial services and has extended this corrective hand to mobile money tariffs.
While all of this has been taking place the conditions in the market such as slowdowns in cash led trades have also boosted the use of these alternatives.
However, a market-led adoption and tariff tweaks can only work to a certain extent. The banking sector still needs its regulator to take a more engaged stance in the encouragement of electronic payments by dealing with the infrastructure issue.
This can be done through the engagement of ZIMRA for a duties and taxes moratorium on all e-payments hardware. Another alternative would be subsidies on such equipment until extensive coverage is achieved in all areas where any form of commerce is registered.
At the same time, such solutions aren’t easy to effect. The government clearly won’t be too quick to adopt anything that lowers its revenue collection prospects and subsidies point to expenditures that also stink of currency leakages.
These are all painful solutions but if the dream of a cashless society powered by e-payments at every turn is to become a reality, the government will have to listen to the bankers concerns and play a bigger role.
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7 comments
I find it hard to believe POS devices costs $500. A quick web search on Alibaba and you can get a top of the range POS with NFC and 4G for $200.00.
After tax and other ridiculous zimra charges it goes up to 500….
Plus i doubt banks would buy pos found on ebay – they will need something thats more exclusive and therefore high priced
the banking sector still believes that low price is low quality
Sadly, in my experience in Banking, the cheaper models have proved costly. Ask anyone in the vanking sector, they will tell you the models most suitable for our market are Ingenico and Verifone. Why is this so? It’s because of our poor signal reception in most parts of the country. Trust me, buy a cheap model and I guarantee you will have problems with it in HRE or BYO CBDs
Yes the good old Verifone can handle a GPRS connection very well with good error handling… and is still widely used in Africa
My friend u cant jst buy a pos terminal on Alibaba and connect it to a financial system, u will wake up to find accounts empty.
I doubt these are Ingenico or Verifone machines(The industry standard). These cost around $500. Others, especially the Chineese made ones, have been a problem in Zim e.g their poor signal reception