News

News

Financial

Financial

10 Jul, 2020 | Posted By: staff reporter
RBZ Makes Zimswitch National Mobile Payment Platform & Restricts Ecocash

Zimbabwe’s central bank has announced that Zimswitch is now the designated national payment platform for all mobile money providers with immediate effect.

In a statement, Governor John Mangudya of the Reserve Bank of Zimbabwe said all money transmission agents should be connected to Zimswitch no later than August 15, 2020.

“In accordance with the provisions of the National Payment Systems Act [Chapter 24:23] and the Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations, Statutory Instrument 80 of 2020 (the Regulations), the Reserve Bank of Zimbabwe (the Bank) wishes to advise the public that it has designated Zimswitch as a national payment switch with immediate effect.

“All mobile money transmission providers and mobile banking providers are hereby directed to be connected to Zimswitch as provided for by section 4 of the Regulations. To ensure seamless integration, all money transmission providers and mobile money providers must complete the necessary installation or deployment or commissioning of infrastructure and connection protocols, credentials and documentation for connection to Zimswitch by no later than 15 August 2020.”

The central bank did not elaborate on the move though economic commentators say it is designed to stop the trading of hard currencies in the black market, which has allegedly resulted in the devaluation of the local bond note.

The government recently restricted trading in some mobile money markets, saying they were fueling the illegal selling of United States dollars and other currencies.

In a statement, the Ministry of Information initially announced that all mobile money transactions were cancelled only for the central bank to issue a retraction, noting that they had, in fact, restricted EcoCash and others, which the bank believed was causing havoc in the money market.

The Ministry of Information said the measures were “intended to deal with malpractices, criminality and economic sabotage.”

The ministry said government is carrying out “intrusive investigations” that would lead to “the arrest and prosecution of offenders. These measures include the suspension of all trading on the Zimbabwe Stock Exchange.

Last week, the government noted that it is in possession of “impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy.”

The ministry said these included “the illegal externalization of foreign currency through transfer mispricing … fraudulently creating and issuing non-attributable and non-auditable agent cellphone lines/accounts, hiding irreconcilable accounts in suspense accounts which hold huge credit balances for unjustifiably long periods.”

It further noted that some activities include “acting as banks outside the purpose for which they were originally licensed as non-banking financial institutions.

“In the particular case of Ecocash, holding well in excess of ZWL8 billion distributed just over 501,000 agent/merchant lines as at 10 June 2020, which is not under the scrutiny of the Financial Intelligence Unit.”

Ecocash was cited as the center pivot of galloping black market foreign exchange rate and hence fueling the incessant price hikes of goods and services that are bedeviling the economy and causing untold hardship to the people of Zimbabwe.

“In this regard, it has been conspiring with big merchants to act as their conduit through which they transfer hundreds of millions of dollars per day to runners on the street who then buy US dollars on their behalf.”

The ministry claimed that some money platforms were facilitating the illicit trade in notes and coins at “contrived rates of between 30% and 50%, thus causing artificial shortages of the same within the banking system.”

It claimed that some cited money platforms were engaging in rampant tax evasion, use of illegal or banned lines, facilitating use of bulk airtime sales at discounted prices, which are “cross rated to phantom USD exchange rates, which further distort the Zimbabwe market and deliberately mop up US dollars from the black market, thus forcing up the rate of exchange in a manner that has hitherto been difficult to explain for the monetary authorities.”

The ministry also claimed that “Ecocash, OneMoney, Telecash and MyCash Mobile Money platforms are all complicit in these illicit activities in varying degrees. Ecocash, however, which controls nearly 94% of all mobile money transactions, is the center pivot of this problem and its resultant impact on Zimbabwe’s economy.

“The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which are epitomized by the so-called Old Mutual Implied Exchange Rate (OMIR). This, in turn, results in four or more US:ZW parallel market exchange rates operating in the market. At any time, therefore, there is the official rate, an Ecocash rate, a OneMoney rate and the OMIR among others.”


ABOUT AUTHOR

staff reporter
staff reporter
Staff Reporter for Zimbolivenews.com & Zimbolivetv.vom



FOLLOW US