Point of Sale (POS) machines increased 20 percent to 70 000 from 56 000 units by end of last year as the country moves closer to fulfilling targets set under the financial inclusion strategy and resolving the challenge of cash shortages. The Reserve Bank of Zimbabwe (RBZ) set a target of distributing 100 000 POS machines across the country by 2020 to promote use of plastic money, a feat that could be achieved before end of next year as most people have embraced plastic money.
This move is set to reduce queuing at banks for hard cash. Due to cash shortages Zimbabwe has experienced since 2016, the RBZ has encouraged the public to use plastic money when transacting.
The uptake of electronic transactions has been encouraging, with RBZ saying it now accounts for 95 percent of all transactions in retail outlets. RBZ governor, Dr John Mangudya said good times were beckoning as various people now appreciate importance of plastic money.
“We are very happy with the phenomenal increase of the POS machines to 70 000 to date from around 56 000 at year end last year. We are on course to obliterating our 2020 POS machines target of around 100 000 given the increased uptake of transacting machines by retailers and individual dealers,” said Dr Mangudya.
He said that the 20 percent growth in the usage of POS machines in the first quarter excites the authorities as far as the embracing plastic was concerned adding more POS machines were coming before year end.
“Of the 371 million transactions carried out in the first quarter of 2018, 368 million transactions were POS and mobile payment transactions.
This indicates that 95 percent of our traders have now embraced plastic money, which is what we wanted when we launched this initiative,” said Dr Mangudya.
But beyond increasing availability of POS machines, Government also wants plastic and electronic transaction costs to come down markedly.
Customers still complain that it remains expensive to transact on plastic and electronic money platforms despite efforts by the Reserve Bank of Zimbabwe to have charges reduced.
The RBZ has asked retailers to charge 10c for transactions of between $1 and $10.
However, there is a feeling among consumers that the cost skyrockets when one makes multiple purchases of small items such as bread and milk per day.
Mobile money transaction costs have recently been pushed up by unscrupulous dealers who sell cash at a premium of 20 percent or more.
EcoCash, which controls over 90 percent of mobile money transactions, has challenged customers to report unscrupulous dealers so that corrective action is taken.
Even some reputable wholesalers and retailers are putting premiums of up to 30 percent when consumers are purchasing using electronic forms of payment, with products being considerably cheaper when using physical cash.
Despite several warnings from Government and RBZ to abandon the illegal multi-tier pricing, sellers remain defiant.
Traders set high prices for goods when consumers pay electronically to force them to use cash, which in turn is used for arbitrage.
Meanwhile, Confederation of Zimbabwe Retailers president Denford Mutashu, said although retailers applauded the set POS target, there was latitude to also reach people in the rural areas.
The central bank, together with CZR have embarked on a programme to promote the use of credit and bank debit cards in the rural areas to ease challenges of cash shortages.
“At first we were doubting that the 100 000 target can be reached, but with the pace that the central bank has been availing the POS machines the target is within the reach.
“These would be enough to cover even the remotest of areas where people still walk tens of kilometres to access money,” said Mr Mutashu.
Government’s financial inclusion initiatives also target broadening access to and provision of vulnerable groups with financial services, critical for sustainable economic growth and development.
The vulnerable groups include youths, women and micro, small and medium enterprises.
This has seen the RBZ licence the Zimbabwe Women’s Micro-Finance Bank Limited on September 14 last year, and has also initiated licensing of the Youth Empower Bank Limited.
This post first appeared in The Herald