Mobile Money Arrives in Zimbabwe

Posted by: admin on Mon, 2011-10-31 13:14

The country’s recent political and economic crises mean that Zimbabwe has been late to experiment with advances in technology. This is finally changing, as suggested by the recent introduction of mobile money products. Institutions are clamoring to launch products to profit from this untapped market.

By Chief K. Masimba Biriwasha

Harare, Zimbabwe - Zimbabwe, which has been slow to adopt innovative technology, is on the brink of introducing mobile money services. Telecommunication companies are positioning themselves to explore mobile money transfer platforms as a supplementary revenue stream. Every day in the country’s newspapers, telecoms and banks are advertising the benefits of these new products.

Mobile money services have had a transformative effect in other parts of Africa, particularly Kenya. With access to a mobile phone, a customer can use many of the same financial transactions that usually require a trip to a brick-and-mortar bank. Many believe “unbanked” low-income earners, who have been traditionally ignored by commercial banks, have the most to gain from mobile money products.

Whether mobile money will take off in Zimbabwe remains to be seen. Telecoms and banking institutions have been slow to introduce mobile banking, in part because of the country’s volatile economic environment over the past decade.

A crowded mobile market

In recent months, there has been a flurry of activity as telecommunication and banking institutions rush to introduce mobile banking products. Examples of new products launched to date include Kingdom Bank's Cellcard, Tetrad's eMali, Econet Wireless' EcoCash, CABS Bank’s Textacash, Interfin Bank’s Cybercash, CBZ Bank's Mobile Banking, among others.

CABS Bank’s Textacash and Interfin Bank’s Cybercash both operate on Telecel Zimbabwe’s mobile money transfer platform. The ZimSwitch Mobile platform, as it’s called, will enable the 19 financial institutions already connected to ZimSwitch to offer mobile banking. According to ZimSwitch business development manager Adam Roscoe, these institutions comprise 85 percent of Zimbabwe’s total banked population.


It is Econet, however, that might have the greatest advantage in the mobile money market. As the country’s leading mobile operator, Econet’s customer base makes up more than 60 percent of the mobile phone market, in addition to possessing extensive infrastructure.

A boon for rural Zimbabweans?

Expectations are high that mobile money will open up financial sector services to millions of unbanked Zimbabweans, particularly in rural areas.

"The adoption of mobile technology is viral and the use of mobile banking services will quickly spread," said Palmer Mugavha, Marketing Manager of Interfin Bank.

Undoubtedly, the rapid spread of mobile phone penetration, as opposed to bank outreach, has created a fertile ground for mobile money to grow in Zimbabwe. Mobile banking could be the platform for rapid financial inclusion of people in remote and rural areas. Soon these citizens will need only a mobile phone to access essential financial services previously unavailable.

Like in many parts of Africa, most people in Zimbabwe have no access to banking facilities. People face access issues to banking that range from great distances to a physical branch, the lack of funds to open accounts, and concerns about their security when traveling to a bank branch with cash. The economic crisis in Zimbabwe over the past decade also resulted in a loss of confidence in the banking system. It is anticipated that the mobile banking system will help to restore confidence as well as draw in new customers.

For people living in the rural areas, there will no longer be a need to travel to the city to withdraw money. Once they have received an SMS confirmation that money has been deposited into their virtual account, they can visit the nearest farmer, supermarket, post office or nongovernmental organization in partnership with a bank or mobile company to collect their cash.

“Mobile banking is largely a win for the customer rather than the bank. Banks traditionally had expensive distribution channels established in anticipation huge volumes of people would go there to transact,” said Tawanda Nyambirai, TN Financial Holdings chief executive and chairman of Econet Wireless, Zimbabwe’s leading cellular network.

First steps in mobile money implementation

Econet is set to deploy 500 EcoCash agents throughout the country. The company has also established partnerships with 200 post offices and 300 independent agents. At the time of publication, other mobile banking operators had not disclosed details about how many agents they will employ.

"You will not find a bank at every corner of the country, but, thanks to the extensive coverage we have built over recent years, mobile phone access has spread to virtually every corner of the country,” said Douglas Mboweni, Econet Wireless CEO. “Sending and receiving cash will now no longer take days, it can now be achieved virtually instantly."

There is some concern that EcoCash's transaction fees are higher than normal bank charges, and this may hinder many people from using the mobile banking platform. According to a report in a local business weekly newspaper, the high charges may be stemming from the cost of going solo where the mobile phone operator incurs high IT infrastructure costs to set up the whole platform.

For the customer, the costs of transacting are expected to fall as competition increases around the provision of mobile banking services. Besides transaction costs, the security of the mobile money transactions platforms is an issue that telecoms and banks will have to confront. According to analysts, mobile payments fraud may include identity theft, stolen PIN codes, account information hacking, money theft, and money laundering and subscription fraud, among others.

Another factor affecting the implementation of mobile money in Zimbabwe is the average user’s lack of familiarity with the concept. It is expected that a mobile money literacy program will need to be rolled out to ensure the success of the innovation.

Chief K. Masimba Biriwasha
The author is a journalist from Zimbabwe with an extensive background in development and communication policy. He blogs at

Recent Articles by Masimba
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