RBZ Left EcoCash Better Off Than They Were Before Cash-in & Cash-out Ban

Tinashe Nyahasha

EcoCash billboard

So this whole week has been consumed by the EcoCash fiasco. As predicted, the central bank’s ban on cash-in and cash-out made things worse for you and I. They then turned around and reversed their decision and said cashing in and out could go on as usual except that cashing out is now restricted to a maximum ZW$100 per transaction.

Advantage to EcoCash

EcoCash’s real competition is not really OneMoney and Telecash at least not right now. EcoCash’s biggest rival is Zimswitch, Zimbabwe’s card switching platform. The two of them dominate all consumer payments and that is the reason EcoCash is not on Zimswitch- they are a platform in and of themselves not merely a mobile wallet as regulators continue to treat them.

A third rival to EcoCash is cash itself . Every transaction that is done in cash is a transaction not done on EcoCash and thus the fintech company doesn’t take a cut there. EcoCash loves the fact that Zim is 90% cashless, they hate cash. They want your money to stay on their platform moving from one wallet to the next and back again.

When the Reserve Bank of Zimbabwe reversed their decision to outlaw cash in and out, they added a strict restriction to cashing out and not to cashing in. They are now saying one can only cash out a maximum of ZW$100 per transaction which is just above USD5.00. Say what?

Essentially they have increased friction when moving money off EcoCash while maintaining moving money into the EcoCash ecosystem frictionless. If EcoCash complains about this, don’t believe them it will be mere crocodile tears. They like it when it’s that much harder to take money off their platform

Like I said yesterday, if regulation is not well thought out, it strengthens the more dominant player. In the battle between EcoCash and cash, the central bank has just done EcoCash a big favour.

12 comments

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  1. Interest

    100% correct… They literally just going to chip away at wallets taking their cut… This gvt has really supported them… Why don’t they force them to reduce charges at least…. The 2% could have been offset by a tarif reduction equally and hence cost consumer zero

    Reply
  2. Actuary

    You nailed it. This is the reason why Ecocash introduced a charge for Wallet to Bank Transfers. They want the money to remain on their ecosystem for as long as possible

    Reply
  3. Blair

    As it always is…smoke and mirrors. Let’s not forget Strives huge donations to big birthday bashes etc. Of course there is a collusion. It’s only be seen to be doing something

    Reply
    1. EeeYo!

      I like the word “collusion”, last time I heard it was on BBC about Trump collusion with Russia !

      Reply
  4. T.. R. Nyawiri

    The mission of the government and its economic agencies is not to fix and pull down Econet and its subsidiaries but to mend up citizens’ lives that is being daily eroded by economic opportunists who want to create loopholes to enrich themselves without value addition to the economy. Personally I have not been happy with the policies we have seen being implemented recently but on the ecocash recent development I say well done government and RBZ. I am on the list of those rallying behind them on this.

    Reply
    1. E. T

      Still after all has been said and done, the ridiculous premiums these unscrupulous Ecocash agents are charging have not been addressed. For the ordinary citizen that’s were the bone of contention lies. One has to pay at least 30% to cash-out, thereby further eroding the already useless local currency. When is this madness ever going to stop? We need cash from our local banks in order to ditch the ecocash agents.

      Reply
    2. Eleanor

      Still after all has been said and done, the ridiculous premiums these unscrupulous Ecocash agents are charging have not been addressed. For the ordinary citizen that’s were the bone of contention lies. One has to pay at least 30% to cash-out, thereby further eroding the already useless local currency. When is this madness ever going to stop? We need cash from our local banks in order to ditch the ecocash agents.

      Reply
  5. Rych

    Apart from cash in and cash out.pple are still transacting at premiums by sending to each other directly on their phones
    .Rates are accelarating again,,its sad for agents commissions..

    Reply
  6. Terrence Nyoni

    Mere Zanu-PF chefs turf wars in my books!

    Reply
  7. simbo

    cash out wasnt really money going out of the system or cash being disbursed. This was more of a transaction between money changers, you cash out and receive dollars in exchange not bond, but the money stays with the agent who received the cash out.

    Reply
  8. Cool-Head

    This is the umpteenth policy summersault within 1 year. It doesn’t require a rocket scientist to see that the monetary and fiscal authorities have and continue to fail dismally, all to the detriment of the economy in general, and the public at large…

    In the absence of resignations or firings, can I suggest that Zim forms an expert bi-panel committee of development economists and accountants from China, Malaysia and India, to periodically review and publicly advise us monetary and fiscal policies and measures on a monthly basis…

    This is the only way we can redirect our efforts at attaining vision 2030, otherwise it’s all another empty rhetoric – for example, economic growth this year was projected at 5.3% last year, but we are actually headed for a -2.1% so far, a difference of 7.4 percentage points!!!

    Yangu ndima ndasakura ndapedza.

    Reply
  9. same

    The most important thing right now is to ensure that street people holding mobile phones and those in kiosks do not just create RTGS balances having received USD notes that they pocket and waste on trinkets. That causes galloping inflation due to too much baseless RTGS money supply and hurts those trying to do honest production and honest work like doctors. Imagine spending 7 years studying and you can easily get paid by someone who just somehow gets a phone, sits on a pavement, gets forex from the public and pumps whatever value he/she wants on someone’s wallet at a rate he chooses. You seem doomed and the poor have no cover.

    Reply

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