The second coming of United States dollar transactions in Zimbabwe presented recurring problems. If you are in possession of foreign currency you have a lot more power than you do if you have local currency. That power is however limited in Zimbabwe because of the friction points that exist especially for international payments. The one avenue available is through opening a prepaid VISA, Mastercard or opening a NOSTRO account.
Accounts like these have become easier to open, for example, BancABC’s Dial’a’Visa. But the problem with any prepaid card service or NOSTRO account is that you have to physically go to a branch to deposit money. You have to locate a branch and banks are not always accessible in every area.
Having physical foreign currency mustn’t limit the things I can do with it. What if I want to pay for my Netflix, for example, and I don’t want to jump through hoops in order to do so. We shouldn’t always have to go through banks in order to facilitate forex transactions both local and international. There should be a way that allows anyone with forex, whether they have an FCA account or not, to be able to access the services they desire.
One possible solution for this comes in the form of Outdoor Payment Terminals.
What are Outdoor Payment Terminals?
Outdoor Payment Terminals (OTPs) are self-service kiosks for outdoor or unattended payments. These machines are often installed in the corridors of shopping complexes, service stations, supermarkets, adjacent to ATMs or in convenient stores. Anyone with a legal tender can go to any one of these machines and perform a range of payments and transactions. An added benefit to these machines is that they are available 24 hours a day (depending on where it’s located of course).
My own experience with OTPs was when I was studying in Ukraine. The machines were everywhere and they offered a range of payments that I could do in cash. I would receive money from home through remittance services and convert the money into the local currency when I needed to. OTPs were the main way in which I bought airtime, paid for the internet and other utilities. I am not alone in this, there are a number of students who still operate this way.
The payments that OTPs provide weren’t only limited to paying for the day to day things. A company called iBox has OTPs that also allow anyone interested to buy cryptocurrency.
I often wondered why OTPs weren’t a thing in Zimbabwe. Being away for so long had shrouded me from the cash crisis in the country. In Ukraine, physical currency wasn’t a rarity meaning that OTPs were ever-present. But as we are now in dollarization 2.0 these machines, I think, have a place in Zimbabwe.
How can Outdoor Payment Terminals be useful in Zimbabwe?
With USD now being commonplace in Zimbabwe, there is, I think, a need for these machines. The first need is of course to facilitate US dollar transactions and payments. This doesn’t only have to be for international payments. Local payments for a range of services can now be done in USD.
If you are in a bind because you have surpassed the ZWL$5000 mobile money limit and you don’t have enough in your bank. But you have physical USD on hand, wouldn’t it be good to have another avenue to make that payment?
Circling back to international payments. Foreign currency opens us up to a number of services that we didn’t have access to before. Entertainment platforms like Netflix, online education services like Skillshare and Coursera, and other subscription services can be made more accessible through OTPs. It shouldn’t be a requirement to have a forex account of whatever nature to have access to those services and more.
Banks can also be a part of this
Financial institutions can also benefit from OTPs. By this, I mean that anyone who has been south of the border may have encountered ATMs (OTP/ATM hybrids) that allow you to deposit money and make other transactions. In our case since we now have foreign currency in circulation, banks can make OTPs increase convenience when it comes to forex deposits.
This can be done in much the same way as it has in South Africa and other countries. If you have a prepaid foreign currency card and you want to recharge it then there should be ATMs that allow you to do so. Customers also won’t be limited by bank operating hours in order to access services.
Another area that “OTP/ATM hybrids” could be useful is in domestic remittance. BancABC recently launched City Hopper, a service that allows Zimbabweans the ability to send money between cities at a favourable 2% rate. The limitation that BancABC faces, however, are the number of locations that the public can access this service.
Beyond the 18 Branches they have countrywide and Pick’n’Pay Aspindale, they currently don’t have any more locations (although expansions plans are underway). This is another area where I think OTPs could help. If they deploy OTPs or “OTP/ATM hybrids” that can both accept and give out money they, I think, will be closer to solving their problem.
There are, however, limitations and problems
As good as this technology is, it is limited by the cost because these machines aren’t cheap. On top of that, they will require maintenance and security. OTPs will hold a lot of money and forex at that which means that where they are placed has to be secure for those who want to use them.
The one way I can think of deploying these machines is pairing them with ATMs to start off with. A number of ATMs will have at least have a guard present as well as surveillance.
The success of these machines in Zimbabwe depends to a large degree on the range of payments that can be made through them.
- Utilities of every nature (ZESA, ZINWA, Internet, Vehicle Licensing, DStv etc)
- Local and international remittance
- International service payments
- Mobile money cash in and cash out*
- Purchasing cryptocurrency
These are the services that I can think of that OTPs can facilitate. I am sure they are more but I think these will make a compelling case for them.