With over 6.7 million subscribers and controlling 90% of the mobile money transactions, EcoCash is Zimbabwe’s biggest mobile money service and for many good reasons.
Recently, NetOne launched OneMoney to replace the defunct OneWallet and connected it to ZIPIT joining Telecash that has long since joined the Zimswitch platform that has brought about a lot of convenience to the proliferation of the use of plastic and mobile money in Zimbabwe. But despite all this, EcoCash is reportedly not interested in joining ZIPIT.
By Pearson Mbendera
Econet Wireless Founder Strive Masiyiwa is on record saying that he wants to create a cashless society, by giving Africans access to a bank account on a mobile phone, a feat that EcoCash has managed to accomplish in Zimbabwe.
The service has been in operation for a while and has been well marketed, offering convenience in sending and receiving money, amongst many other functions, way before there was a cash shortage in Zimbabwe. In 2013, 43% of Zimbabwe’s USD12.8 Billion Gross Domestic Product (GDP) moved through EcoCash, showcasing how powerful and important it is; and today, there are a lot of transactions happening on the platform, but its absence from ZIPIT is limiting the convenience the service is supposed to provide, even costing subscribers money and opportunities.
But a cashless society cannot be created by EcoCash alone and operating as a monopoly, it is created by a web of institutions, offering interoperability for the convenience of the customer, something EcoCash is yet to grasp otherwise it would have joined ZIPIT, or maybe they are making too much money by restricting the functionality of EcoCash in sending and receiving money, something that guarantees money stays in EcoCash while they rack in a lot in charges that are incurred in using EcoCash.
To begin with, EcoCash had created a system that could sustain itself as a standalone. With over 30,000 agents, over 20,000 merchants and a bank on its back, there is plenty you can do on EcoCash without having to send money to another bank or wallet, and you can even send money to an unregistered number, even a non-Econet number. But the cash shortages in this country have necessitated the need for interplay among banks and mobile money services, making the joining of ZIPIT a must for EcoCash.
Things have changed; what EcoCash was, or what it was created to do and what it offered can no longer satisfy the financial needs of the many Zimbabweans registered on EcoCash as cash shortages in the country have created a much need for interoperability among financial institutions which EcoCash is a part of.
EcoCash charges are higher than most, if not the highest, meaning that in some transactions, it will cost you less to transfer your money from EcoCash to another bank account and then use it to pay for goods and services on POS machines than paying via EcoCash (should it be available on ZIPIT). This will actually mean that joining ZIPIT will reduce the per-transaction fees EcoCash makes, a reason why they may be hesitant to join the popular platform.
The benefits to the people will be plenty, they will be able to save money as ZIPIT charges are lower than EcoCash, sending money to non-Ecocash accounts would be easier and even transferring money from one’s personal account to the EcoCash wallet and back will be cheaper.
While not its fault, the cash shortage and the arbitrage opportunities emanating from it has made it possible for people to manipulate the EcoCash system with a lot of agents charging a premium to people wishing to make cash-outs. Joining ZIPIT will give these people more options of accessing their cash and not being entirely at the messy of exorbitant EcoCash agents.
There are a lot of changes that Ecocash needs to effect to offer more convenience to its subscribers, the first would be joining ZIPIT as I believe it is a move that will force them into make a lot of changes like reviewing their charges and getting rid of linking EcoCash with bank accounts as someone can easily transfer money to and from Ecocash using ZIPIT at a much cheaper cost. With over 14 million transactions a month via ZIPIT, EcoCash may end up making even more despite lowering their charges.