A quick glance at the most recent POTRAZ telecoms sector reports makes it clear that EcoCash is still the mobile money service used by most Zimbabweans with a market share of 91.9% and 98.9% of the total value of mobile money transactions.
We were pretty surprised when it was brought to our attention (on good authority) that the Ministry of SMEs intends to distribute COVID-19 relief funds exclusively through NetOne’s OneMoney mobile money platform.
Whilst OneMoney has been on an upward trajectory the government disbursing these funds exclusively on one platform raises many questions.
For starters, NetOne only has 6.4% market share and the Ministry of SMEs intends to counter this by distributing NetOne lines first and then follow it up by funding those lines they would have just given to the beneficiaries of relief funding.
Whilst that seems like a great plan on the surface it discounts the fact that building a merchant network takes years of work – as evidenced by EcoCash. Currently, OneMoney’s merchant network simply isn’t as strong as that of EcoCash.
This begs the question, why not just distribute the funds using whatever platform citizens use? If a recipient is already on OneMoney why not give them the money via OneMoney and if they are on EcoCash instead why not use that? Heck, even those on Telecash (0.7%) should be able to get relief funds on their preferred mobile money platform.
The government did something similar with the $200 lockdown payments, announcing that the monies would be distributed to those who have OneMoney mobile money wallets.
The fact that a government entity would see this crisis as an opportunity to strengthen NetOne and OneMoney’s standing in the market is pretty telling of how government interference in local business is the order of the day.
Is this a good thing for OneMoney
For OneMoney this will be a double-edged sword. They’ll acquire a significant number of new customers because of this and some of these customers may continue to use the service after the money has been disbursed because of the cheaper transaction charges.
Inversely, a number of the beneficiaries will just return to their EcoCash lines simply because their relatives send them money via EcoCash and EcoCash has a superior merchant network.
From a product development perspective, NetOne will also take a hit because they are not earning these customers by making OneMoeny great. I mentioned before that EcoCash has built a merchant network and payment ecosystem over 7 years – that comes with many lessons and NetOne are being handed a customer base by the government instead.