Today we attended a press briefing where Econet Wireless Zimbabwe and CBZ Bank announced a new mobile banking direct partnership. The partnership basically entails that EcoCash subscribers who bank with CBZ can now move money between their EcoCash mobile money wallet and their traditional bank account from their mobile phones. Users of the service can also check the bank balance and get a mini statement all via EcoCash.
The value on the banking side is that where a bank customer used to need to physically go to the bank to withdraw money (or find an ATM or POS terminal) they can now use EcoCash agents as a new cash withdrawal channel. On the EcoCash side, subscribers that bank with CBZ don’t need to find an agent anymore to money into their EcoCash wallet as they can do it directly on their phones, anytime.
The tariffs levied on EcoCash users are structured like so: a wallet to bank transfer is treated as a normal EcoCash cash out (from the wallet) and the normal cash out tariff applies, which is 2% with a maximum cap of $6. Bank to wallet, balance inquiry and mini statement inquiry are all free of charge.
Econet said in a press release sent out today that 4 more banks will be connected before the end of the week.
What we find interesting about the development is that the integration is happening directly between Econet and the bank. We would of course have expected it to happen more efficiently between Econet and Zimswitch. Zimswitch, as you may know, already has a platform that currently connects most of the banks (banks accounting for 95% of the roughly 1.5 million traditional bank accounts in Zimbabwe) to the mobile networks allowing banked individuals to transfer money between the banks and, more importantly, to send money to any unbanked individual that has a mobile phone. CBZ Bank is a member of Zimswitch.
Even more interesting is the fact that this approach Econet is using – to negotiate with each bank directly and separately to have their banking systems talking to EcoCash – is what Telecel tried and failed it, eventually deciding to hand over the mobile money hassles to Zimswitch. The key difference is that Econet is doing it as (let’s call it) phase 2 of their mobile money roll-out. They amassed some 1.7 million EcoCash users first and then went to the banks with the attractive offer. Telecel did it the other way round; they went with nothing to the banks. And it didn’t work.
There are indications Zimswitch itself has been trying to get this connectivity to EcoCash to allow banked individuals on the Zimswitch platform to transfer money to EcoCash accounts, but so far it hasn’t happened yet. We’re guessing CBZ decided that if Zimswitch is finding it difficult to give them access to Econet’s attractive EcoCash subscriber base (one clearly much larger than all the banked individuals in the country), they’d just go ahead and do it directly.
Today at the press conference we asked the CBZ Bank Executive Director, Colin Chimutsa, if the new direct partnership with Econet is a parallel effort to what they are already doing as a Zimswitch member bank, seeing that the functionality being launched is somewhat similar to what’s already available on the Zimswitch platform. In response he said that he is not aware the Zimswitch platform allows banked individuals to transfer money to mobile phones of the unbanked. According to him, the only functionality he’s aware of is that of transfers between banked individuals. We have no idea how he wouldn’t know of-course, and a side conversation with another CBZ representative at the event yield nothing inspiring confidence.
Maybe CBZ treats this as them buying two POS machines from two different device manufacturers; that what matters to them is reaching those 1.7 million EcoCash subscribers regardless of the route they do it. That Zimswitch being rendered redundant in as far as that type of money transfer is concerned is not their issue. Chimutsa explained in the exchange that to them as a bank, broadening their offering is what is important and that “the results will speak for themselves.”
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This are happening
Ecocash is not a necessity it is neither a means to an end, just because banks are now signing up to it doesn’t mean it will be a key driver of the economy in the foreseeable future. For the current currency regime it is indeed applicable but that could change, I wonder if 1.7 million is the actual number using the service, likewise I seriously doubt that all 1.5 million account get transacted on each month.
I don’t speak on behalf of zimswitch but they are executing their mandate of connecting banked people well, If they were not doing so, I doubt their would be a single supermarket using their platform, or ATM dispensing money from a card that isn’t from that respective bank. To say zimswitch hasn’t relied on a card system would be a lie, but to then say ecocash now has a superior product to zimswitch is another falsehood.
Sometimes we just need to take our emotions aside and see the true picture. For now EcoCash is the only product that works, we cant bank on something taking donkey years to be usable and already has serious shortfalls before its even launched. So, mr guest stop hating and see the bigger picture. I doubt you own a business that needs EcoCash or vPayments or anything else that can help improve the process of landing deals…
In any situation there is need to be objective and look at both sides of the coin, you seem to use ecocash quite often, let’s not examine my need of it or lack of and for a moment look at the title of the article it’s damning zimswitch and putting ecocash in a light of being a better more relevant product which now is being extended to banks. If that makes me a hater so be it, but up to now I’ve no use of ecocash neither would I make use of it even if the bank I use made it available. I simply don’t trust Econet products period, whether you regard them as reliable is your own opinion, I’ve voiced mine and have no regrets in doing so.
Understood. The truth is in business we want products that work. Its that simple. Strangely I am not a fan of Econet and I don’t like them on personal level, but if they throw something that works for me and 1,7million more Zimbabweans then why not use it. Zimswitch havent given anything yet to us. So until such a time they give us a working product, they are as good as any other aspiring entrepreneurs.
EcoCash ndizvo, i last used an ATM card around 2003/6, I only got back to puting my cash in the formal system through ecocash!
Using an ATM is better than keeping cash under the matress which is what you most likely do…
Way to go CBZ, why have a middle man (ZimSwitch) if you can connect directly with EcoCash. No middle man means less charges for the customer!!! Now we need more banks and hopefully an internet based EcoCash module or API and we are sorted!!
I would rather have ecocash connect to ZimSwitch, for the obvious reasons that the payment switch used by Zimswitch is a one of the best, and it has a proven track record of cos id love to see ecocash grow.
But i had an opportunity to work with ZimSwitch and the work they have done is impressive, granted the guys did make a mistake in reaching out to the “unbanked” and on-line payments, but their platform is more & solid secure
the long and short of it is “their better together than against each other”
This is setting a dangerous precedence. Though it is helping people, it means that if you are not an Econet subscriber but a CBZ customer you lose. And if you are a CBZ customer but not an Econet subscriber, again you lose. So now one is forced to either change banks or switch cell networks to enjoy this service.
I could be wrong but does this not “smell” fishy?
As far as I can see econet is closing up the market to other player which means the services are only going to be more expensive for the end users. It would be more interesting if Ecocash had partnered with the other 2, only 2, mobile providers in the country to create an open m-banking platform. However they might try proprietorship with their technology, they are shooting themselves in the foot. Anyhow, I think there is a definite limit to deregulating the market and Econet will one day be faced with a mammoth court battle which will cost them dearly. This is what greed and corruption does, and soon enough more innovative and flexible solutions will emerge. I advise Econet to re-evaluate their business strategy and open up the market so they can focus on their core business and get revenue from more innovative and flexible players. On the other hand I advise small fish to take Econet to court because they are stiffing innovation in the industry. If I am a content developer for the mobile industry for instance, how can I enter such an industry if Econet the company I would like to place my content on has such complex interests thereby meaning they will not allow innovation on the mobile network. This means its only the econet clients who will suffer eventually. Anyhow, greed in Zimbabwe is fueling Econets growth, not innovation.