ELECTRONIC transactions soared by 597 percent to US$2,6 billion in the first six months of the year from US$373 million in the same period a year earlier, but cash withdrawals from automated teller machines (ATMs) slumped to US$1 million, highlighting how the economy is shifting from cash-based transactions to electronic platforms.
Cash shortages on the local market have upended the structure of the national payment systems, with mobile and electronic payments becoming pervasive.
ZimSwitch’s latest report shows that monthly transactions progressively increased since the beginning of the year.“Electronic transactions have continuously moved from US$266 million in January to US$490 million in June 2017. POS (Point of Sale) transactions continue to hold highest transactions per month with an average of US$393,6 million.
“Mobile money platform is gaining ground, with a monthly average of US$46,5 million,” said the report.
During the review period, internet-based transaction volumes rose to 113 928 valued at US$18,9 million.
The rollout of POS machines by banks has helped fuel transactions.
ZimSwitch forecasts that mobile transactions will likely rise as banks are now linking their accounts to mobile payment platforms.
Finance and Economic Development Minister Mr Patrick Chinamasa said in his 2016 Annual Budget Review the promotion of digital finance by the Reserve Bank of Zimbabwe (RBZ) saw 32 629 PoS machines and 40 590 mobile money agents deployed across the country. The National Financial Inclusion Policy envisages that by 2020 more than 200 000 PoS machines and 90 000 mobile money agents will be deployed.
Confederation of Zimbabwe Retailers president Mr Denford Mutashu said it was possible to seamlessly transition to a cashless economy.
“Most banks have linked their banks to mobile payment platforms such as the EcoCash, TeleCash and NettCash and this has made it easier for anyone to transact anywhere without any difficulty.
“The rural businesses can now benefit from this mobile payment system and I expect the volumes to be high in the next few months,” said Mr Mutashu.
He also noted that there is a realisation that electronic money is now the new normal.
The value of plastic money and electronic banking transactions grew from US$56,9 billion in 2015 to US$61,7 billion in 2016, thus trending the economy away from cash towards greater utilisation of electronic systems for transactions.
Experts say the country’s informal economy is continuously feeding the stubborn cash culture.
The central bank has, however, been slashing charges in order to increase the allure of plastic money platforms.
POS own-bank customer services attract a maximum charge of US20c, while POS issuer charges have been removed.
Maximum fees for making withdrawals at ATMs are pegged at US$2,50, and merchant service commission attracts a fee which ranges from zero to a maximum of 1 percent for local transactions. SundayMail