It was just a matter of time, wasn’t it? With domestic remittance services launching left right and centre, EcoCash was the last marquee name that wasn’t in the mix. Which was, until last night, a little surprising…
The remittance game in Zimbabwe is one of the most sought after because the figures for incoming funds have been increasing over the last couple of years even when early pandemic projections had them going down in Sub-Saharan Africa.
In 2021 the figure for Zimbabwe stood at US$1.430 billion which was a 43% increase from the sum registered in 2020 and the year of the pandemic saw remittances hit a billion which surpassed the then all-time high of US$939 million recorded in 2015.
With the numbers continually on an upward trend, companies have tried to position themselves wherever they can to make the most out of cash inflows. We saw a lot of activity from banks like CBZ launching a dedicated money transfer branch, to remittance startups like Senditoo and Shumba Money offering limited run transaction free promotions for cash sent to Zimbabwe.
On the domestic front, businesses have also tried to find out where they fit into this and we have seen a number of domestic remittance services like BancABC’s City Hopper, NBS Banks’s Instant Cash, Steward Bank Remit, Mojo Mula and many others. Even mobile money operator OneMoney launched its own service (OneRemit) to try and muscle in on local foreign currency trade. And now the country’s largest mobile money service EcoCash has thrown its hat in the ring.
EcoCash domestic remittances
Last night EcoCash Zimbabwe announced that it would be entering the domestic remittance game through its EcoCash FCA wallet. The mobile money operator said that customers will be able to do this through a new shortcode, *153#.
This new access platform is there to give some separation from the conventional EcoCash *151# which is for local currency only. And for those who prefer using the EcoCash app, the service is there but you will be able to switch between local currency and USD.
Limits, cash-in/cash-out, and charges charges charges
The service is open for everyone even if you aren’t a registered EcoCash customer. However, there are some differences in how much you’ll be able to send. If you are a registered EcoCash customer, you will be able to send US$500 per week with a limit of US$2,000 per month with those who are unregistered only getting to send half that amount. This is not out of the ordinary because those are similar terms to BancABC’s City Hopper.
As with any other remittance service, you will be able to cash in and out at the Econet Shops nationwide or you can cash in and send the money through your FCA Wallet. To make a transfer in person, you will, of course, need to bring with you your ID/Driver’s Licence/Valid Passport and the money you wish to transfer.
The next question is “How much is this all going to cost?” and the answer to that question is:
|BANDS||REGISTERED CUSTOMERS||UNREGISTERED CUSTOMERS|
|Lower Value (S)||Upper Value (S)||Send Money Fees||Cash Out Tariff||Send Money Tariff|
From the tariff table, EcoCash’s domestic remittance service looks to be the cheapest in Zimbabwe when you are going up to the higher figures (for just sending money, it’s complicated but I’ll explain). For example, if you want to send US$100 (as a registered customer) you will be charged 1.56% which is cheaper in comparison to the competition because for the same amount you will be charged:
|Limit||Fees||Cost of sending US$100|
|BancABC City Hopper||US$250 for non-BancABC customers|
US$500 for BancABC customers
However, on the receiving end if you choose to cash out the money you will be charged US$2.61 for the US$100 you have received. So, if for example, you owe someone the US$100, you’ll have to factor in the cost of sending the money US$1.56 as well as the US$2.61 if they intend on cashing out. The fees, according to the launch event, are factoring in the 2% tax that the govt instated on all transactions.
Pricey, are there any benefits?
Those fees are a little steep in comparison to what is offered on the market, however, there are some benefits when dealing with a wallet-based remittance service. The first that I can think of is you can deposit the money into your EcoCash FCA in bulk (which is a default account if you are registered on EcoCash). All you’ll then have to do is send the money from your EcoCash FCA to your intended recipient or multiple people.
This might help in cutting travel costs and wait times at Econet shops if you were to do it transaction by transaction as you would with any other domestic remittance service that doesn’t have a wallet.
The second advantage is that this kinda solves the change issue that we have all encountered when transacting in USD. Zimbabwean companies love to price things in dollars and cents but can’t give you the exact change. This usually forces many to receive the remainder in local currency at whatever rate the seller is feeling on that day. And it’s rare for someone selling something to afford you a favourable rate. They will most often like to profit whatever they can from the transaction or the sale doesn’t go ahead if the buyer decides to pull out.
Additionally, if the money was meant for a specific service that requires USD then paying it out of a wallet digitally might be a better option, especially on days when that service doesn’t have an open branch.
The third benefit, which is more for EcoCash, is that customers stay within the Econet Group ecosystem. Yesterday we reported on the Econet Smart USD bundles, which are one of many services/merchants that the mobile money operator’s customers can use their EcoCash FCA wallet to pay.
These are just a few things that I could think of that might make these charges worth it. However, I would really like to know what you think about EcoCash’s domestic remittance service.
At the launch event last night, EcoCash also said that it was doing a dollar for dollar promotion which will see EcoCash matching whatever you send through their domestic remittance system up to US$10.
The mobile money operator has set aside US$10,000 for this so it appears that if you put in US$10, EcoCash will credit you with the equivalent amount.
You can watch the EcoCash Domestic remittance with the player below or by clicking the link here
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