Why not write yet another article about Innbucks? The Simbisa Brands owned ‘wallet’ service which has been suspended by the central bank had achieved an incredible run. They came out of nowhere and their run in such a short time is way more inspiring than Zimbabwe’s second most popular mobile money service by number of subscribers: OneMoney.
How popular is Innbucks?
Simbisa Brands has not shared any specific numbers on usage. In its half year report up to December 2021 Simbisa had only this to say about Innbucks:
The group established a new business, Innbucks, in partnership with a local fintech investor. Innbucks is a mobile application which allows customers to send, receive money and buy food at Simbisa outlets. Currently the service is available in the group’s largest market, Zimbabwe. The service has been well received in the market.
Google Playstore says the Innbucks mobile app has been downloaded more than 50 thousand times. This is more than any bank application in Zimbabwe except for the CBZ Touch app which has been downloaded more than 100 thousand times. OneMoney? The OneMoney app is nowhere near Innbucks, it has been downloaded more than 5 thousand times. Of course this doesn’t mean OneMoney has less subscribers than Innbucks or less active subscribers than Innbucks.
3 weeks ago, Techzim conducted a survey to get an idea of domestic remittance services people were using to send money to each other. The survey was distributed via WhatsApp and more than 1500 people responded. 21.3% of survey respondents mentioned that they had used Innbucks to send money while 6.8% mentioned having used OneMoney. This was an open ended question where people would list services themselves without being prompted.
The first 2 big opportunities wasted by OneMoney
To understand the opportunity that exists and seemingly being squandered by Netone’s OneMoney while being exploited by Innbucks, let’s first discuss the most important opportunities to fall on mobile money operators and yet not fully exploited by OneMoney over the years:
The first opportunity was of course at introduction of mobile money in Zimbabwe. OneMoney was introduced into the market before EcoCash but EcoCash beat them in a very short space of time. This is an interesting tale that we did a case study report on 4 years ago and we will not go into it. The thing to note is that this greenfield opportunity was wasted by Netone and EcoCash won resoundingly.
2015 to 2016 brought the second huge opportunity for OneMoney to gain some significant share of the market. At this time, Zimbabwe was transitioning to a literally cashless economy. Cash was hard to come by but people still needed to transact. With the proliferation of mobile phones, mobile money was the obvious form of money to take over from cash for day to day transactions.
The ideal scenario at this time for OneMoney would have been at least converting all NetOne subscribers to become OneMoney wallet users who would use it to transact while Econet converted its subscribers to use the EcoCash wallet. However, this is not what happened. What happened is that a lot of NetOne subscribers bought secondary Econet SIM cards just so they could have EcoCash.
Why did it happen this way? EcoCash invested in getting a lot of merchants on board meaning that if you had EcoCash you could walk into a store and use it to buy stuff. NetOne had no vision or imagination and was going through crazy boardroom coups. Opportunity squandered. In absolute numbers 2015 to 2016 is the period when EcoCash gained the most subscribers. Transitions matter.
Mobile money is coming full circle
The reverse of what happened between 2015 and 2016 is happening. No matter what Zimbabwe’s minister of finance and his central bank governor tell you, this country is re-dollarising at double speed and in the process moving from cashless transactions to cash.
The 2015-2016 transition transformed mobile money from being predominantly remittance services for people to send money to and from each other across the breadth of the country. Mobile money became a means for paying for goods and services first and foremost and sadly for OneMoney, EcoCash was way more prepared for this change.
Now, the collapse of the Zim dollar is throwing us into a transition from cashless transactions to cash being king again. When people send money to each other or lend to each other they want their transactions to be in US dollars which they can trust to hold its value and not local currency. Once again, mobile money is needed to be a remittance service.
OneMoney clearly identified this trend and they introduced a USD domestic remittance service ahead of EcoCash. This is the time for them to fight hard and take advantage of the transition otherwise history will repeat itself. Innbucks’ popularity out of nowhere proves that this opportunity exists.
What matters most
Why did Innbucks become popular? It’s the network, Stupid! Simbisa reports that as at 31 December 2021, they had 239 outlets across the country. That is their super power. When you randomly ask a person who uses Innbucks as a remittance service why they do so they will most probably tell you that it’s super easy for them to access their money because of that network.
If OneMoney want to take back share from EcoCash, they need to make a plan about increasing their footprint and they should do it quick. Right now they still have a chance because EcoCash is only offering cash in and out services at Econet shops. Their superior agent network is still sleeping most likely because the Reserve Bank of Zimbabwe is nervous about allowing those agents back online after banning them for facilitating parallel market foreign currency dealings.
NetOne has to use its advantage as a government owned entity to increase their agent network in a way that doesn’t spook the central bank. They should use government service centres dotted across the country as cash in and out points. In fact I don’t have much faith in Zimpost’s attempts at remittances; if only NetOne could convince Zimpost to partner OneMoney instead of trying to go at it alone or whatever it is they are doing. Heck, if it doesn’t go against the country’s constitution or something, I would use ZRP police stations as cash points if I were OneMoney!
That’s the mentality that’s needed to win. Can OneMoney pull it outta the bag? Pakaipa.
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18 comments
Noone trust a govt entity with our usd. Wht if they steal that money and give it to zanu pf to campaign. Onemoney stole my rtgs lst year engaged them on twitter and they did nothing ko kuzoti usd vaanokubiraa
Ye trust is going to be a problem because of the association with gvt. I am sure what happened with your Onemoney transaction was not intentional though. I advise that you try to engage them again
No
Netone should cut ties with the gvt and privatise. The real reason they won’t go anywhere is that only a fool would leave their money in the hands of zanupf comrades. They can have 5 million agents and they still will not come close to Econet. That’s why the comrades started playing dirty and made rules to cripple ecocash in the first place. Even them they know it.
I agree that privatisation is the best route for Netone. The gvt has been talking about this for years but for some reason they have been failing to get an investor. Most of the strategic misses at Onemoney can be attributed to them having gvt as shareholder and thus politicking instead of leadership
Charges in innbucks are negligible.i would prefer over USD ecocash. And yes the convenience definitely helps since I got a chicken inn very close.i dare say I’m actually surprisingly impressed with the service. I spend less time queuing then at my bank
No com
But the is problem right there in a nutshell.
If Netone is failing to compete right now when govt has all but basically crippled their main rival Ecocash, how can we expect them to survive once the dragon(Ecocash) is unleashed?
I remember an article in Techzim talking about how govt forcing Ecocash to join zim switch was the golden opportunity for Netone to increase market share to be honest it did increase by 2 or 3% and that’s it.
There’s a Blackmarket transfer rate for bank transfers and Ecocash no-one talks about OneMoney and if after the govt has crippled your competitor you still can’t score, well you are hopeless.
You could argue that Telecash is more hopeless but that is just a bad joke.
Innbucks was basically a pirate they were operating without a licence and so they could get away with charging lower rates than the competition but now that they also have to give govt it’s cut it remains to be seen whether they will still be in the game.
Netone lacks innovative thinking, now I’m not saying that the executives at Netone are dull but let’s face it they have to spend most their time and energy trying to avoid getting stabbed in the back whilst thinking about how to stab their rivals in the back leaving very little time or energy to be really innovative. So the best Netone can do is some very poor copy and paste and hope to succeed.
And the main shareholder is of no help either with its constant meddling.
I agree that the main problem at Netone is who their shareholder is which then traslates to their governance culture and the high turnover of key executives. The Muchenje years show how leadership changes things. Netone was starting to be inspirational then especially on the telecom side.
I don’t think Innbucks was just about the fees. I think its ubiquity and product design is the superpower.
I personally never bought the narrative that integration to Zimswitch was going to move the needle much. I don’t think such a change was going to be strong enough to offset network effects advantage Ecocash has. Currency transitions could do that though if Onemoney acts fast enough and builds a network faster than Ecocash but….
On innbucks I really think that all this fuss is about the fee’s and licensing. This is what I speculate is the issue
Innbucks is basically a bank masquerading as a remittance service. A remittance service will take your money take their cut and quickly forward it to the recipient who has a strict time limit to take the cash.
Simbisa on the other hand will take the customer’s money and convert it to innbucks and hold it for no extra charge for a minimum of 2 months where no fees will be levied. The customer can also cash out those innbucks to US$ at any given time for a small 1% charge. And oh by the way you can also transfer those innbucks to other customers who can withdraw it as US$ for a small fee at any one of the branches in country. This is just a savings account! With extra bells and whistles tacked on.
Now think about this for a moment walking around with US$200 cash is a very stressful thing, leaving it at home the wife/husband might misuse it, so what if there was a way to always have the money on you but with the peace of mind that it was in safe and secure place? The answer is innbucks!
Now imagine that 500000 people had the bright idea of putting their US$200 in Innbucks for safekeeping that’s US$100 million as an interest free loan to Simbisa, that’s also out of the reach of the RBZ’s grubby little hands because Simbisa is not an official bank so they have no duty to put the money into the banking system. Now I don’t know about you but I highly doubt that there’s many banks in Zimbabwe sitting on US$100 million worth of customer deposits because as soon as the money comes in it’s immediately withdrawn there’s no love or trust of banks in Zimbabwe which 100% the RBZ’s fault. So the RBZ which holds a weekly forex auction for US$30 million nd has a backlog of companies that have not received their funds is now looking at the funds in innbucks as maybe their salvation. Simbisa is wary of baking the cake only to eat crumbs has probably declared that they are willing to go nuclear and close down the whole operation and pay whatever US$ fines imposed, using local currency at the prevailing rate on the day of the judgment and this would be legally right considering the whole one is to one judgment fiasco. So right now they are probably discussing how much each will get to eat of this huge cake.
Hmm interesting thought exercise there. In Zimbabwe you can never rule anything out.
People depositing money with Simbisa would have been a good idea but I don’t know if people still don’t trust any of that almost as much as they don’t trust banks. I think Zimbabweans no longer trust anyone but themselves for custody of their money even with the risk of misuse by a spouse or even burglars.
Even so, do you think Simbisa was thinking that far? I doubt they would have thought about access to Innbucks deposits as cheap loans- it’s just too risky. I think their play was to encourage usage of hard currency in their stores initially and then possibly they also saw the advantage of increased foot traffic to those stores as people used Innbucks for sending and receiving money. I do think most of the money has been moving through instead of being held in the Innbucks wallet. Eventually they were going to (or are going to) further develop the service into a neo banking service of sorts
But that’s the thing isn’t there are very few companies that were formed from the get go with the idea of becoming the behemoth that if they cough the government panics.
But seriously though the idea was probably just a way to improve revenue and foot traffic whilst reducing their exposure to the bad joke we call the Zim$.
And the Innbucks app has only about 50 thousand downloads nowhere near the 500 thousand accounts that would make the US$100 million interest free loan dream a possible reality.
On the other hand the Starbucks loyalty program. Much has been written and talked about how the money held in their gift cards and app has essentially been an interest free loan for Starbucks to the tune of US$1,6 Billion. So since the template was already there what if Simbisa decided to implement it with a bit fine tuning to adapt it to the local situation? The risk would be marginal. Just because there is a few thousand US$ sitting there doesn’t mean that you use it all. Coupled with the fact that there are daily inflows of US$. I think that you could justify using at least 25% without causing any financial or reputational damage to the company.
And the connection is so obvious….
Starbucks = Innbucks
🤔🤣🤣
Hahaha Starbucks = Innbucks
So maybe the RBZ is arguing that Simbisa needs a banking license with all the responsibilities that this entails like KYC, deposits protection(after all US$100 million or more is a lot of money and a pinky swear is just not good enough) , 2% govt tax on transactions between accounts (mmm, extra revenue the fiscus likee!) and oh! Put that sweet sweet forex in a place that the RBZ can legally get its hand on it.
Simbisa is probably is arguing loudly that they are operating a loyalty program for their customers not a bank and all they need is a remittance operators licence and the fact their customers are using the loyalty program as a savings account is besides the point and purely incidental and in a low whisper saying that if these RBZ children of….(bad word) concentrated on fixing the economy instead of thinking up new ways to rob the people they wouldn’t be having this discussion in the first place.
So Simbisa found a perfectly legal loophole to gain interest free US$ loans and the RBZ is trying to somehow get a cut out of it.
Oh that Simbisa is hiding behind a finger: I agree there. Simbisa is probably the listed company with the most guts in Zim right now. They refused to use the interbank rate as their rate for financial reporting regardless of what the auditors think. They launched a ‘discount’ programme that essentially made the parallel forex market cross the 1:200 mark last year. I think at some point they said we don’t care anymore- better they shut us down than to comply with nonsense and die slowly by a thousand cuti
Imi be techziim imi mainyepa muchiti kwingy iri zero rated im going to recall you
Looking into this. Sorry
The fintech war in Zim is getting more interesting, it’s painful that small startups big worry is not competition but the process of getting regulated RBZ is working against them indirectly
It is quite a sad story there Farai. The RBZ has a regulatory sandbox for startups that in my view is not a sand box at all. The requirements they have for startups in that sandbox are almost exactly the same as before the sandbox existed