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National Payment System Transactions Decline, POS Transactions Decline The Most

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The volume, as well as the value of transactions processed through the POS terminals, declined significantly during the first quarter ending 31 March 2018 (Q1 2018). An acute shortage of physical cash has triggered a cash crisis forcing Zimbabweans to resort to electronic transactions.

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Despite, the widespread and increased adoption of cashless transactions in Zimbabwe, it’s curious to witness this marked decline in the use of POS. POS transaction value declined by 10% to $1.9 billion down from the $2,1 billion recorded in the final quarter of 2018 (Q4 2018). And the transaction volumes decreased by 16% to 61 million in comparison to 73 million POS transactions processed in Q4 2018.

The curiosity is even raised more considering that just last month, The Reserve Bank of Zimbabwe reported that there was a 20 percent increase of POS devices (from 56 000 to 70000) in circulation. The question that comes to mind is that,  how can POS devices increase when the usage of them was declining? This drama is in the background of the fact that, cashless payments in the country have been dominated by mobile money for the past 6 months.

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However, I don’t think the marked decrease in POS transaction volume and value can be attributed to the use of mobile money because mobile money platforms registered a decline of transactional volume to the tune of just 1%. 

Rather, the decline in POS transaction volumes and values can be ascribed to just a general decrease in commercial activity in the country as the National Payment System in its totality registered a 9% and 4% decrease in value and transactions respectively in Q1 2018. The closure of many companies and increase in prices of many basic commodities has lowered aggregate demand in the economy and in turn lowering commerce.

Although financial institutions are pushing for the adoption of cashless payments systems in line with the Government’s push for a cashless economy, a huge chunk (although smaller than POS transactions) of transactions in the country are still largely in cash. 

The introduction of incentives such as tax rebates for businesses that report high usage of cashless systems may initiate a constant upward trend in volume and value of POS transactions as a result of the increased adoption of POS devices

Incentives have been found to be effective in increasing POSs transactions and cashless payments in general, in markets such as India. To reduce dependence on cash-based systems, the Indian government has offered small tax rebates to traders who report that at least half of their transactions were made through cashless payments.

 


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14 thoughts on “National Payment System Transactions Decline, POS Transactions Decline The Most

  1. Don’t forget that Q4 is when the coup-not-coup happened. There was plenty activity when people were buying booze and stuff for parties etc. The whole country was in hyper-mode to the extent that some people even had parties using money saved for school fees. I am sure that if you check on the number of defaults in rental payments for domestic properties Q1 would top the list.

  2. Check your dates guys
    “Despite, the widespread and increased adoption of cashless transactions in Zimbabwe, it’s curious to witness this marked decline in the use of POS. POS transaction value declined by 10% to $1.9 billion compared to $2,1 billion recorded in the final quarter of 2018 (Q4 2018). And the transaction volumes decreased by 16% to 61 million in comparison to 73 million POS transactions processed in Q4 2018.”

    Are already doing stats for Q4 2014

  3. Honestly you cant compare Q1 with Q4. Its common knowledge that Q4 will be higher than Q1. Be patient. Wait for Q4 2018 to pass, compare it with Q4 2017, then we can talk. For now look for Q1 2017 data, compare it with Q1 2018.

  4. “Despite, the widespread and increased adoption of cashless transactions in Zimbabwe, it’s curious to witness this marked decline in the use of POS
    Mobile money transaction is..”

    You need to revise that statement because its implying that cashless society is measured by POS transactipns which is totally wrong.

    Cashless can be mobile money payment, which is dominant currently, you dont need a POS for that. Econet is now trying this kombi paying which will increase movement of money via mobile wallets and shows that its now the bedrock of money movement in Zim

    1. “However, I don’t think the marked decrease in POS transaction volume and value can be attributed to the use of mobile money because mobile money platforms registered a decline of transactional volume to the tune of just 1%.”

      Did you read that too?

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