18 June 2012

Mobile Money finds Success in Zimbabwe

Last week I wrote about the challenges faced by mobile money. It appears that Zimbabwe is one place where mobile money is doing well. An article in this Sunday's Standard goes as far as to suggest that mobile money could supplant cash.

The article lacks any reference to actual evidence of the growth of mobile money in Zimbabwe, so that makes it hard to take it too seriously. However, the general feeling that it is successful and the observed growth is seemingly a good sign.
Presently, under the Mobile Moola product, Econet subscribers pay US$0,07 for each transaction.

However, on the EcoCash platform, a customer faces a 2% charge of the transaction for sending money to a registered EcoCash user, while sending to a non-registered user attracts a 7% charge.

Although EcoCash does not charge monthly fixed usage fees, the charges are based on the amount of money transferred, meaning the bigger the transfer, the more a customer pays.

the Kingdom Cellcard product however attracts a fixed monthly charge of US$1,30, making it popular with the bank's clientele base.

Although depositor confidence is slowly returning to the financial sector since dollarisation in 2009, most people continue to be averse to the idea of saving their money with banks. Estimates state that over US$2 billion is circulating outside the formal system of the economy.

CABS' TextaCash is in collaboration with Telecel with the distinct advantage of being linked to one's mobile phone, in order to do balance enquiries and transfers.

Clients using the TextaCash product have commended the absence of monthly bank charges, as normal bank cards attract a monthly fee.

EcoCash has witnessed a phenomenal uptake ever since its launch last year, as it registered up to one million subscribers in the first six months.

Econet chief executive officer, Douglas Mboweni, believes there is no reason why an Econet subscriber should not use EcoCash as this reduces distribution costs. The company's distribution costs presently stand at 10%-12%, but through more increased uptake of EcoCash, these are anticipated to come down to 3%-4%.