As Zimbabweans we have been a deprived lot. If it is not one nation introducing Visas so that we can’t visit them, then it is another banning the use of our ETDs (Emergency Travel Documents) when going to visit. Our misfortunes have also been prominent online. Facebook did not allow us to advertise to followers in Zimbabwe even though we had over 1 million followers using their service, Twitter and LinkedIn still don’t. Then there is the Blackberry and BIS/BBM issue. Many cried and wimped as to why the gods of IT frowned upon us and kept such highly necessary services from us.
Then there was the PayPal saga. First NOBODY could access the website from a Zimbabwe IP address, then they opened up (but only just) allowing users with accounts/credit cards linked from other countries to access their services from here. There were allegations of sanctions and all kinds of unprintable words that were thrown at the online payments gateway for keeping us in the dark (errrr, ok, that’s ZESA’s fault, but you get what I mean).
Well alas, as of yesterday, Tuesday 17 June 2014, PayPal is now open to Zimbabwean users who can now not only access the website from these shores, but also open an account and LINK their credit cards to their accounts and make online payments! No more work-arounds needed. Here’s how. Hooray! (or is it?!?)
While we were left all out in the cold by the powers that be at PayPal, we have managed to build our own thriving payments systems that are relevant here in Zimbabwe. We have EcoCash, Telecash, OneWallet, vPayments, Textacash, CellCard (no link on their website, but that’s another article all together), Pay4App, Pay Now and soon Pay Wallet. The bulk of these solutions are mobile payments, as it was something that the banks took long to realise and latch on to thus leaving an open playing field.
Here are three of the top reasons why you shouldn’t be popping the champagne just yet.
1.One of the critical aspects of PayPal is that you need to connect/link your bank card, whether debit or credit to your account. Here enters your first challenge: Everybody in Zimbabwe DOES NOT have a credit card! Ask the banks. This is the main reason that all of our mobile money solutions have sprouted here in the motherland. With one needing to have a bank account (with the exception of FBC’s prepaid MasterCard) in order to get a Bank Card, the chances of this service being adopted by the layman on the streets is very low.
2. The current legislation that is tied to PayPal require them to collect a host of information on the transactor, something that your mobile wallet does not collect at the time of registration. For this reason, we will NOT be seeing any EcoCash to PayPal transfers. As the bulk of our payments (debatedly) are run through mobile wallets this is a shortcoming that will affect a number of would be sellers of products to Zimbabweans.
3.The current setup of PayPal accounts for Zimbabweans is for PAYMENTS ONLY. We cannot have our citizens buying products and services from us here as we do not have the ability to open a merchant account. Something vPayments already allows. If your product or service targets locals that are based here, then nicely start putting those glasses away and put that bottle back on ice.
As Zimbabwe is a cash economy, people are living literally from hand to mouth, thus equating to very little opportunity for people to bank their monies. As there is a ‘claimed’ 85% unemployment rate (I’d rather say that 85% are NOT FORMALLY employed), the bulk of the country’s citizens receive their money through non-banking channels. Ask Econet. Added to this are the high bank charges that you have to pay for the bank to ‘spin your money’, oops, I mean safe guard it for you, and to a person who is earning very little, every cent counts. Then there’s the trust issue over the banks ‘stealing’ our money in the cross over to dollarisation.
With not many people using bank cards, my assessment is that the solution will not pick up as quick as Telecash’s API launch and EcoCash’s soon to be announced.
As an entrepreneur, startup or developer, what’s so exciting about PayPal’s entry into Zimbabwe? How do you think users here can benefit from it? ZimAsset anyone?
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29 comments
William Chui u r a funny guy
Thanks there PHP, wasn’t aiming for funny, but informative.
Funny does work, however.
On a whole, does PayPal solve any issues that you are facing as an eCommerce business?
You pretty much nailed ‘funny’. Your declaration: “PayPal does not work inZimbabwe” needed to be qualified with “for local eCommerce businesses”. Consumers (payers) are all over it (see “How to make Paypal payments from Zimbabwe”*, recently published on Techzim). For international payments, Paypal is the only option,until the day the Chelsea Utd website starts accepting Ecocash as payment for your kit.
* not verbatim title
The thrust of the article was more from a business/entrepreneur’s perspective. How best will we, in the StartUp world, benefit from being able to pay as opposed to selling our goods/services?
Isn’t there a business case for Econet to issue every registered ecocash customer with a ‘virtual’ VISA or Master card debit card? Customers can then use such debit card just like any other debit card issued by the bank. If you receive money in your ecocash wallet it immediately becomes available for online shopping using the debit card. If you receive money on paypal, it becomes immediately available on the ecocash platform. It would be nice to be able to do PayPass kinds of transactions when grocery shopping without having to fiddle with the clumsy USSD menus for every small transaction.
i think the prepaid ecocash credit card would be a good move. but i dont think ecocash will want to partner with paypal on anything because they are direct competitors.
Would be a great initiative Marek . M-PESA have it in Kenya, where you can link your VISA (and they’ve also provided a VISA card for those that want it) to your mobile wallet. This would be a great initiative me thinks
its market will b very very small considering wat u syd zim is a cash economy and unless i want to buy a domain or an original Chelsea jersey from the chelsea website. tts wen i go thru the trouble of getin a debit or credit card and buy using paypal
the fact that paypal is giving zimbabwe a sniff means that the ICT sector in Zimbabwe is making progress. its not all gloom this paypal move, the international community is opening up to doing business with Zimbabwe and this is one of the critical steps towards the long journey that zimbabwe has to go to have a competetive ict sector.
sooner rather than later paypal will open up the full benefits of their payment platform to zimbabwe, its inevitable.
i also think its time the local payment gateways and local technology startups start looking global there is no reason why they cant take over the African market since they have a better understanding of the african problems when they come up with solutions.
True Greg. Valid points you have there.
Would be interesting to see Zim StartUps having a broader look of things, instead of just focusing on Zimbabwe.
Any ideas for StartUps with a global approach from Zimbabwe?
Personally, Paypal or no PayPal. It really doesn’t matter.
I am poor, living in a poor country with my target audience being poor users with poor broadband connections using simple phones.
Its a good move if you really needed it. Otherwise I think ZANUPF hypnotism has sunken into all Zimbos, we rather solve our own problems our own ways rather than beg.
I dont see myself using Paypal anytime soon, I need bread and clothes and a method that will create local empowerment first. Lets stick to paynow, telecash , ecocash , pay4app …. etc.
Thank you for your thoughts Trevor.
Great to know that we work at solving our own problems. Preferably in a way that can get us all out of this poverty stricken situation
just to add: With no electricity and no viable solutions in sight.
Look out for my article tomorrow that touches on a StartUp idea for ZESA/power
we wanted paypal to transact internationally not locally
True. Was that to buy (give out money) or to tell (get money) internationally?
Short-sighted article…. Somebody said the same thing when Liquid was laying fibre everywhere now they are ruling not only Zimbabwe but Africa…
I don’t think the article is short sighted but i do agree with the point about Liquid
It’s a double edged sword really – Paypal had a huge chance to corner the payments market before ecocash and all came along but they sat behind there “restrictions” (we will never know the true reason why they have not come to Zim before now).
Now i get theres financial complications attributed to coming to the Zim money market so i can appreciate things will take time but in the Zim context i do see how paypal is all but irrelavent – but at least it will meet the needs of a perhaps small minority of people, and things can only go up right?
Paypal is not into “Mobile money”, I don’t know if that’s deliberate or not. Ecocash is nearer to the “mobile money” end of the spectrum than an the “ecommerce payment gateway”, where Paypal is.
Speaking as a person who hates Paypal (hello disputes), I would not say it is irrelevant, perhaps for zim-zim payments. Anything else, they have no competition.
Let’s just say Paypal decides to jump through all regulatory hoops tomorrow, and start signing up merchants locally: if you sell goods/services internationally, who would you choose? Ecocash? Pay4App? Maybe Telecash?
Thanks for your thoughts Anthony.
However, as PayPal is just an interface with your normal credit/debit card, the numbers are not yet justified here in Zimbabwe.
Though as you state there is a segment of the market that will benefit from this and the only way is up from here.
Thanks for thoughts magneto.
Would you say that now that we can pay for services using PayPal that a lot of StartUp’s eCommerce challenges will be solved?
You raise some good points William but PayPal also has some good things going for them:
1. The stickiness of the brand – the brand PayPal is easier to sell than VPayments
2. Trust – I think that people will trust PayPal more than local brands because it’s a renowned and international brand. Although I think that it’s smarter to trust Ecocash for example because Ecocash is local therefore easier to reach when you have problems with your account (I’ve had problems with my PayPal account before and getting in touch with them was not easy. It’s not like they are in Msasa). But let’s face a lot of people are not very smart hey?.
3. We live in a global village – PayPal suddenly becomes an option when you want to sell to people outside Zimbabwe – something you can’t do with PayPal now I know but hey….
The only other option is to get a merchant from CBZ but from my experience with the guys at CBZ are not very keen to work with startups because startups expose them to too much risk.
But there are reasons PayPal won’t work and you have done a great job of highlighting them.
asi patrust apa people can trust Zimswith vpayments because they know it from the banks atm
i cant use ecocash to pay my stuff from ebay saka inotadza kushanda sei ?
Hi all, I read this article yesterday and I have been trying to put my mind to what the William Chui is saying. Anyway here are my thought, comparing PayPal to PayWallet is misplaced. Reason being that non of the payment options indicated the the above article allow us as Zimbabwean’s to send payments outside the country as these local payment options are only confined to Zimbabwe.
PayPal for a person like me has come at the RIGHT time, as it allows me to quickly pay third parties that are outside Zimbabwe in a flush, instead of wasting my precious time filling bank paperwork to transmit just $20. (I can now also send money to my sister arikuchikoro kuSA for her upkeep, ndakagara hangu mumba mangu)
Anyway PayPal does works, and one last thing PayPal is not for the Unbanked…
Hi there LAZ,
Thank you for taking the time to comment.
My apologies if I failed to deliver my thoughts correctly.
My angle was from a developer/entrepreneur/startup/business/individual that will want to monitise through the payment gateway. Granted, the local solutions don’t afford you to buy stuff internationally, but the view was for allowing the masses locally to buy. Your average Joe on the street does not have a bank account, let alone a credit card. If it wasn’t for Facebook requiring people to sign up with their email address very few people would have an email address!!!
So the jest of the article, was that for a re-seller of goods and/or services, PayPal’s introduction into Zim is not so big a deal
I agree with your above comment. Anyway the good that I have taken from your article is that it has given us a opportunity to evaluate and discuss various ways payment platform can assist and benefit us Zimbabweans.
Anyway thanks for the article keep them coming
did you take globalisation into context, is this not a plus for people trading across the boarders
Its certainly not for Local use, in any economy there are always better and more efficient Local payment solutions. Currency and trade differs across any economy PayPal’s goal or reach will never affect Local solution it aims to broaden Global reach and Global trade.
So as a local you will be running without a pair of shorts unless of course you expect International payments