EcoCash defies Baz

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DESPITE concerted calls by banks for Econet Wireless (Econet)’s mobile money service, EcoCash, to be regulated and ensure it does not eat into the conventional banking market, the giant mobile network provider has announced huge expansion plans including moving into new sectors like health.

Report by Taurai Mangudhla

The banks, through the Bankers Association of Zimbabwe (Baz) , argued EcoCash should be bound by the country’s banking laws to enable a level playing field after the country put a ceiling on bank charges effective this year.

Baz said there was no guarantee EcoCash would not utilise the partnerships with banks to steal customers from the institutions, but Econet insists the argument is invalid as it accounts for more than eight million mobile phone subscribers compared to the combined one million plus registered depositors.

With attempts having been made to put tight policy control around Safaricom and Vodafone’s MPESA in Kenya and Tanzania, the local financial institutions, plight has also become a regional concern which has seen African policymakers and regulators from Alliance for Financial Inclusion member institutions gathering in Tanzania last month to launch the first African Mobile Phone Financial Services Policy Initiative.

The meeting reflected on effective best practices to support policy reforms for mobile financial services in Africa within a regional framework.

EcoCash is however unfazed with the concerns, announcing ongoing plans to integrate three major banks — CBZ Bank, TN Bank and Stanbic Bank (Stanbic) — onto its EcoCash platform within ten days and the majority of financial institutions by end of March.

Stanbic became the third and first international bank to partner EcoCash, meaning anyone with a Stanbic account that is registered on EcoCash can now use their mobile phone to make banking transactions from anywhere.

The mobile phone company recently got the support of Deputy Prime Minister Authur Mtambara who threw out banks’ argument, saying government had declined to promulgate a piece of legislation that penalises EcoCash for straying into banking activities.
He said banks should stop whining and develop mechanisms that match mobile money.

The DPM applauded the mobile money innovation saying it gives 80% of Zimbabwe’s population, currently unbanked, access to banking facilities.

In its latest statement, Econet said it had finally reached an agreement with most of the banks on EcoCash integration, adding the process is now progressing smoothly.

The company sent a message to all of its more than eight million customers saying issues have been resolved with virtually all the banks and integration was progressing well.

Econet said when a bank is integrated, a person can undertake banking from anywhere in the world at any time of day.

“You can move money from your account, and send it to someone in Zimbabwe even at midnight from China; it is that flexible,” said the company spokesperson.

The company said banks that do not have integration have been concerned about losing customers to those banks that are already integrated with EcoCash.

Last year EcoCash started partnering banks to ramp up mobile money transfer facilities.

With most of Zimbabwe’s estimated 14 million population currently in the unbanked bracket and government failing to solve a change crisis emanating from adoption of a multiple currency regime that was adopted in 2009, experts say mobile money transfer is an ideal solution.

The appetite for mobile money is huge in the country, with most of the population having access to mobile phone services.

Latest figures show the country’s three mobile networks — Econet, NetOne and Telecel Zimbabwe — have a combined 11 million subscribers.
Econet CE Douglas Mboweni said the move would see EcoCash becoming a financial service and not just a mobile money transfer as EcoCash registered banks account holders would be able to transfer money from their bank accounts to their EcoCash wallets and vice versa.

Econet says transactions on its mobile money transfer facility, EcoCash, are expected to grow more than threefold and top US$1 billion by August 2013 as compared to US$300 million registered in its first year of operation.

Ecocash was launched in August last year and has grown to register more than two million users.

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