Despite the rise of dollarisation and cash transactions, we still rely on electronic transactions to some extent. Out in the physical world, paying for stuff using electronic funds has almost always been easy. However, there has always been some friction when paying for stuff online.
This is why it’s exciting news that Paynow, the famous payment gateway, added Zimswitch Online as a channel. In a message to merchants, Paynow explained it: Zimswitch Online enables locally banked customers to easily make online payments using their local debit cards. They say:
Customers are not required to pre-register; instead they simply enter their debit card number, expiry date, security code (CVV), and the one-time passcode (OTP) sent to them via SMS.
That doesn’t sound all that groundbreaking because if you’ve made online payments using Visa or Mastercard then you are familiar with that process. However, if you have tried to pay using your Zimswitch-enabled card online you know it’s not been that simple.
You had to use Vpayments and boy was that a convoluted process. The customer had to register and this is how the process went:
- You had to fill in your contact details, including an email address
- You would get an email asking you to confirm your email address
- After you confirmed your email address, a random debit of less than $1.00 would be deducted from your card
- Then you would check your bank statement to find this small debit
- Then you would return to the page linked in your email to enter the random amount and confirm that the card belonged to you
That was the registration process and not many people were keen on going through all that. That was unfortunate for all the merchants selling stuff online. It was a tall order trying to convince people to sign up for Vpayments.
The friction didn’t end there. When paying with Vpayments one had to choose to check out with Vpayments, enter their email address and password and select their card to pay. A customer had to do this every time they used Vpayments.
So, you can see how Zimswitch Online is a welcome addition to the Paynow payment channels list. To make it even sweeter, for the few that have USD-denominated accounts, Zimswitch Online allows both USD and ZWL currencies.
As great as I think this new channel is, I am worried that it won’t be appreciated as much as it should be. The main reasons for this are the declining value of Zimbabwe’s currency and the lack of trust in the financial system. This has led to fewer and fewer people having bank accounts that they use regularly.
See how retail transactions have been trending: