Zimswitch Isolates Steward Bank, Econet Backsdown

By Toneo Tonderai Rutsito

Econet Wireless Zimbabwe has finally backed down to pressure after seeing their sister company cum bank, Steward, facing  imminent industrial isolation.

About 15 Zimbabwean banks are already signed up on the Zimswitch making their market share a significant voice and force to reckon,  though they are all beaten in terms of  numbers in subscriber base against Steward Bank.

Econet revealed that it will deal with individual financial institutions only with regards to the opening up of the USSD gateway

The move was necessitated after all other banks had hinted to isolate Steward bank from their Real Time Gross System  (RTGS) a  system which transfers money from one bank to the other  leaving Steward Bank in the cold.

ZimSwitch banks

Sources said banks had through their industry body tried to negotiate access to the USSD mobile banking platform but Econet effectively side-stepped this as revealed by detailed communications in our possession.

Econet agreed to open up the USSD gateway to banks using an agreement crafted under Bank Electronic Airtime Retail (BEAR). The agreement laid out transaction charges and settlement conditions among other matters.

Bankers expressed concern over the structure, which they said was heavily skewed in favour of Econet.
“In general, the proposed agreement gives overwhelming powers to Econet to control the product form as well as the leverage to terminate the relationship at their convenience,” said a source in the banking sector.

Under the agreement, Econet can suspend or terminate services. It also accords the firm power to change tariffs at short notice, which would make future pricing structures of mobile banking products indeterminable.

 

Econet proposed to charge banks 30 US cents per transaction and most likely due to fear of accumulating balances had suggest that they be daily settlements towards the dues.

“Econet also gave itself the right to approve advertising collateral to be used in communicating with subscribers. The company wants to define or prescribe each bank’s definition and packaging of mobile banking and content distribution services with regards to short codes.”, revealed a source.

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