Last week, we revealed that Econet and local banks hand reached an understanding with banks to open up its platform for full USSD functionality for the ZimSwitch mobile money transfer services. However, a headline story in today’s Herald Business has revealed the price Econet is charging the banks for each money transfer to a mobile phone that an Econet SIM holder makes.
In the article last week, we mentioned the fact that the issue of Econet charging more for transfers to mobile phones was still a sticking point. The Herald report says it indeed is as Econet is asking for USD 30 cents for each USSD session where the subscriber sends money to a mobile number. In comparison, for all other transactions like buying airtime for example, Econet charges 5 cents. And as for what the other networks charge the banks – 0 cents.
As we mentioned last week, this brings into question issues to do with network neutrality to traffic from 3rd parties:
This is akin to an internet provider charging more per megabyte for traffic to some websites (competitor websites) than they would for all other traffic.
It may be therefore that Econet is pushing the banks to the EcoCash option – that is to integrate at the EcoCash level. Or is just distracting the banks when Telecel needs their attention most.
According to the report, in addition to the prohibitive fees, Econet is apparently also proposing unfavourable terms like:
- Econet has unilateral power to suspend or terminate services
- Econet can adjust tariffs at short notice
- Econet wants transaction fee settlements done daily
- Econet wants to retain the right to approve which marketing material from banks can be terminated on its network
- Agreements valid for one year
Although the Herald report says that banks are threatening to decline RTGS transactions from Econet owned Steward Bank as a way to arm twist Econet into better terms, industry sources say no bank can refuse to transact with an another via RTGS because the RTGS is owned and managed by the reserve bank and any licensed bank is entitled to use it.
Banks can still press Econet by leveraging the ZimSwitch shared services which Steward Bank is not yet a part of.
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10 comments
And the games continue in Zimbabwe’s Mobile Money Wars….should eclipse the Sochi Olympics at this rate!
Good article but you missed it in your association with Net Neutrality, which has to do with the Internet. Though opponents of Net Neutrality exhibit the same anticompetitive trait that Econet is showing, there’s no other relation except an analogy.
The title is misleading
The word u should be looking for is “incorrect” not “misleading”
Limbikani please tell me if zimswitch is not a monopoly shareholding structure of zimswitch please. I think Baz is now collusive in its quest to get a deal for its members that’s uncompetitive. I am told my bank is already connecting to econet ussd for p2p service. All these noise will not make banks profitable like econet. The article in the herald is suspicious and mischievous. Why cant the source include their names if they are confident of what they are saying. I sense the hand of the CEO of Baz who wants to justify why he is Ceo of this non powerful and attention seeking association lately. I think it would be best to write articles with both views in mind. Truth be told banks fear Ecocash. Word of advice. Join them if u can’t beat them.
Why address Limbikani when its clear who authored the article?
RTGS threat simply hot air. Tauriranai chete (negotiate the price – if you cant, then bite the dust). At the rate the banks are busting, we might actually be happy to have more telecash and netone’s product than the banks. Reduce the predatory charges to go back into business
“brick & mortar” banking is hell expensive hence the high charges. Just imagine how much the banks pay for the following things…
– salaries
– rentals for all those branches dotted across the country
– telephone biils
– internet data
– licence fees for software
– audit fees for KPMG and other thieves
– Marketing and advertising
– Credit intrest on “loaded” accounts like Econet, OK, TM, Delta, Chidziva Tobbacco, Royal Ostrindo, ZanuPF, Mimosa, Murowa Diamonds, Unki Mine and many more!
And to think all the costs above must be covered from Account Charges, Commissions and Debit Interest. No other source of revenue for a bank!
Now to compare this with Ecocash or Telecash or “Netcash” is unfair.
If a product serve the same purpose, consumers will go for the cost effective option. The banks have been abusing the customers for too long with little protection from the regulators. So, banks should also pay for the cost of USSD to econet in the same way they abuse us with charges for little service
Actually in terms of comparison they should look at other mobile money offerings in the region. M-Pesa was at some point charging banks USD.0.70cts to move money into its wallet- so banks would charge the customer USD 0.30cts and then pay 0.30cts and that is to move money into M-PESA….i think on this one im with Ecocash, the should derive an economic benefit for their service, which by my count is still the most innovative in the market, they are investing in the agent network to enable easy cash out… So your article Tendai is also skewed like Herald’s you should be a bit more objective in your assessment of the situation
Yhaaa, now the banks know how it hurts!, They steel depositors funds havachadi kubirwawo. if u can’t beat them join them, we can do without banks anyway