Zimbabwe’s Central Bank (aka RBZ) has been on a war path with mobile money services (mainly EcoCash) for most of the year. RBZ firmly believes EcoCash and other mobile money services have led to the currency instability in Zimbabwe.
After some court battles and tightening of mobile money regulations, mobile money in Zimbabwe looks much different than it did a year ago.
RBZ vs Mobile Money
In the Monetary Policy Statement (MPS), the RBZ has detailed some of the faults of mobile money services. There are new allegations included in the list of faults presented below:
- Non-adherence to KYC principles, characterised by creation of mobile money accounts using fictitious and unverified identification particulars;
- Creation of money on the platforms (overdrafts and fraudulent/fictitious credits) which is not backed by balances in the Mobile Money Trust Accounts;
- System infrastructure inadequacies and weak Anti Money Laundering controls;
- Failure to comply with, including willful disregard for, regulatory directives;
- Connivance between mobile money operator employees and customers to delay or illegally bypass account freeze orders;
- Failure to deduct or remit statutory taxes; and
- Rampant abuse of agent, super-agent and bulk payment wallets for purposes of trading on the foreign exchange parallel market.
As a result of all of the above the RBZ today announced two shock moves;
- Agent lines banned permanently. RBZ says agent lines “no longer serve any purpose”;
- Individuals no longer allowed to have more than one mobile money wallet. If you have more than one wallet – the other ones will be closed.
Before today’s declarations, RBZ placed limits on mobile money accounts and agent lines were suspended. Functionality of merchant lines was also restrained and the new rules increase pressure on mobile money services.
2 thoughts on “RBZ details faults of mobile money services which led to regulatory pressure”
Will this save the dodo Zim$, or slash the hyperinflation %s, repeating the Gedion Gono same and expecting a very different result. Mangudya- Ncube – EDiots tripartite economics and financial geneouses!!
For once, I agree with the RBZ. Those faults are spot on. Politically, it was always going to be a problem the moment EcoCash Execs started pontificating that they drive 65% of the payments. In the security corridors, it became an issue. Also, in industry terms, EcoCash no longer saw the need for interoperability. The Agents for all MNOs were no longer serving any purpose for sure!!