If you have not been paying attention, there is a battle in the mobile money space and business models are being tweaked to get ahead. InnBucks has fundamentally changed its business model and it makes for interesting reading.
From now on, InnBucks will not be charging you per transaction. Instead, they will be charging users $1 a month. Once you pay this subscription fee, you can transact as much as you want and InnBucks won’t charge you anything for it.
This covers all transactions, so it’s $1 a month for unlimited deposit, transfer and withdrawal transactions. Of course, this doesn’t lift the government imposed transaction limits that apply to mobile money.
The $1 will be automatically deducted at the beginning of the month. However, that will only happen when you transact. So, if you don’t transact until the 15th, the $1 won’t be deducted until then.
The same applies if you don’t have a buck in your account. InnBucks will deduct the $1 when you next fund the account.
Fly in the ointment
The above sounds good, $1 a month and then no charges however much you transact. There is a fly in the ointment though and you have Mthuli Ncube to thank for it – IMTT.
The government takes 2% of the value of any transfer and unfortunately, there is no way InnBucks can take on that burden for you.
So, the actual result of InnBucks’ new model is that you will pay $1 a month in subscription fees and 2% per transaction to the government.
I hate how the government’s IMTT is messing up these organisations’ business models. InnBucks’ subscription model would have been so much of a game changer if that 2% tax didn’t exist.
Interesting model
Before this subscription model, InnBucks only charged 1% per transfer and that’s what you won’t be paying anymore.
So, this means if your transactions exceed $100 a month you stand to benefit from the new fee regime. If your transactions do not exceed $100, you stand to pay more in charges per month in the new regime.
That’s because if you transfer $99 a month, in the old regime you would have paid $0.99 (excluding IMTT) in fees. RBZ data appears to paint a picture that most people do not transact that much in a month.
In the week ending 24 May 2024, there were 7,784,955 mobile money transactions worth ZiG1,001,233,757.11, making for an average transaction value of ZiG128.61. Multiply that by 4 to get a monthly fee and you get ZiG514.44 (~US$37).
We also looked at the quarterly report for Q1 2024 which was done in the ZWL days and even then, the average transaction values were less than $50.
This likely means most people will be paying more in transaction fees under the subscription model than they did in the 1% era.
However, there are some who use InnBucks for business dealings who will benefit greatly from the subscription model. As InnBucks rightly says, the subscription model “makes managing your finances more straightforward and economical.”
That applies to InnBucks itself too. A subscription model leads to a predictable revenue stream which should make for better planning. It’s a good move.
IMTT
I like InnBucks’ subscription model but hate that Mthuli’s tax makes it so it’s $1 subscription fee + 2% per transaction. That not as special as just a flat $1 monthly fee would have been.
One of InnBucks’ competitors, O’Mari, has been running the ForMahala promotion which offers free transfers, ZIPITS and cashouts.
There is no 2% IMTT on those transactions, not because Mthuli is playing favourites but because O’Mari is footing that bill for users. The promotion was extended to the 31st of July.
It’s commendable that O’Mari is doing that but they can’t do this forever, hence why there is an end date.
What InnBucks is doing is not a promotion but rather how it’s going to be for the foreseeable future.
I wouldn’t bet on Mthuli scrapping the 2% tax, even as it continues to be yet another factor pushing Zimbabwe to transact in cash.
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15 comments
the banks are in real trouble.even ecocash.coupled with the facr that there’s no charge if you use the service…it’s pretty good competition
Unoita kunge uchati Boss isai pay yangu pa Innbucks ini haven’t been using my POSB account lately, ndatoo nechikwereti che $20US ne 120 Zig in both my accounts haaa bank charges are the worst
What do you think they have in store for us after promotion yavo ? Haaa vachangofanans ne Ecocash dai vangoita mahars yacho forever tired nekubhadhara yaMthuli
Yea it’s a pretty good strategy
Hanty innbucks ine many outlets country wide?Ko hazviite here kut unoudza the recipient of the money you want to send kuti enda pa nearest innbucks asvika ipapo iwe cashier wepa innbucks yauri ofona kuti ipai munhu iyeyo $99.00 the sender abhadhara $100.00 kuno?ndinoona zvichi batsira to evade this highway robbery called IMMT.
Thinking in gigabytes🤣🤣
Then the $1 subs will be used up in airtime for the cashiers .
Your name is Philosopher but you don’t sound like one
Y
Why pay a $1 when you can do it for free on O’mari. No charge No IMTT. Tichapedzisira munhu wese akungoita mahara. Competition is health for us customers.
Kudos to O’Mari for their innovative approach and commitment to customer convenience! Their ForMahala promotion is a game-changer, offering free transfers, ZIPITS, and cashouts without the burden of IMTT taxes. It’s refreshing to see a mobile money service prioritizing user experience and willingness to absorb costs to benefit their customers. Keep setting the bar high, O’Mari!
Competition is good for me! 😂 A consumer
Bad for majority that transact less than $37, good for minority. I don’t know if I’ll feel the difference with IMTT +
monthly charge. Seems more like an attempt to increase value of each customer and value Innbucks.
Innbucks is strategically cornering the market. Their move to first win over consumers through the convenience of cash-in and cash-out relying on their outlets is paying off. While the subscription isn’t necessarily cheaper for the majority, it simplifies budgeting for transaction fees, especially in anticipation of the day when Ncube removes the 2% tax.
What’s left for Innbucks is to attract merchants, allowing people to easily buy with Innbucks and eliminating the need to cash out. If businesses start paying salaries through Innbucks, they will have the market locked in, causing significant headaches for Econet.
On the other hand, Omari hasn’t implemented many innovative strategies besides offering free money, which, admittedly, is hard to resist. Ecocash can withstand Innbucks’ rise if they return to their successful agent-based model.
Innbacks
Excellent job on this post! Very informative and engaging content. Solar