I’m sure we have all heard how Zimbabwe is ahead of the curve and we are already a “cashless economy”. Of course, if you are on the ground you understand that we are literally cashless but the trend is showing no signs of slowing down. Mobile money transactions grew by 37.9% from Q1 to Q2 of 2018.
With cash proving harder to access with each passing month day, electronic money has become unavoidable. The fact of the matter, however, is the growth in mobile money in Zimbabwe is a double-edged sword.
Consumers have access to more convenient and risk-free methods of payment through channels such as EcoCash, OneMoney and Telecash but the pitfalls are severe. One of the major benefits of electronic money is that it comes with less risk as you’re less likely to have your card or phone stolen. This is great but when you take a closer look at what consumers are being charged to transact you then quickly realise that it is not only robbers who can steal from you but in fact, the financial service providers themselves have become masters of exploiting consumers. If consumers had an option they would continue carrying cash and run the risk of being robbed rather than pay some of the charges that have come as a result of our cashlessness.
There were some other interesting statistics in the mobile money field;
OneMoney exponential growth
It seems OneMonet has been experiencing some serious growth as they now have 152 415 active subscribers. The number seems like a drop in the ocean but represents a 93% growth which is impressive whichever way you look at it. On the back of promotions such as the OneMoney Fees For Less promo and perhaps some of the challenges experienced by EcoCash over the past few months explain this rise in popularity. Econet and Telecel have 5.4 million and 79 703 mobile money subscribers respectively. In terms of market share, EcoCash is still the dominant player with a 95.1% share of the mobile money market.
Mobile money contributing more revenue than data
Mobile money now contributes 27.2% of revenues – which is actually more than the 20% contributed by data – made by Zim’s network operators. Considering the excessive charges that users have to pay to actually transact electronically in this country this comes as no surprise and I fully expect this trend to continue.
Because of the nature of internet usage in this country -most people are just purchasing bundles for WhatsApp and social media services- network operators are hardly making what you would expect them to be making from data. Despite voice traffic plummeting over the last few years and whatsapp and other social media channels overtaking the medium, voice traffic still amount to 47% of the revenues made by mobile operators.
To hell with inter-operability?
Former Minister of ICT, Hon Supa Mandiwanzira was very vocal about mobile money operators ensuring that they can send money directly to each other but it seems nothing is being done on that front. The value of cross-network mobile money transfers have actually fallen by 44.3% to $120 247. This makes sense when you consider the inconvenience of having to physically go and cash out. Convenience is king and where there is no convenience there is no activity.
Outlook
For the third quarter, I firmly expect that there will be an increase in the number of mobile money transactions as the cash shortages started to rear their head in full force around this time. Remember a few weeks before elections, banks started magically giving out USDs and cash in abundance – what looks like an ill-advised move in retrospect. I think this will have had some effect and slowed down the mobile money transactions, but after elections the reality hit and I expect the growth of mobile money to continue. In most countries, this is usually welcome and positive news. In Zimbabwe, however, it will most likely reflect ever increasing hardships…
To get a more solid idea of our payments sector, buy the Techzim Insights Report on payments and fintech for just $4.99 via EcoCash below:
