GLOBAL payments technology company, Visa, recently held its traditional engagement week with local banks and payments players. The main objective was to encourage electronic payments. The service provider, which has been in Zimbabwe for over 20 years indicated that besides the challenges associated with currency transitions, Zimbabwe is presenting a perfect opportunity for technological advancement on the payments systems. Business reporter Melody Chikono (MC) spoke to Visa Southern Africa general manager Jabu Basopo (JB) to understand the journey the company has travelled in Zimbabwe and what tomorrow holds for the payments industry. Below are the excerpts of the interview:
MC: You indicated that you have been in Zimbabwe for 20 years. Give us an overview of how you have survived in Zimbabwe.
JB: I think Zimbabwe has been an interesting market if we compare it with other markets and those interesting things are associated with the evolution of the market itself. We are talking about payments and in payments there are different factors that affect a payment — the customer, the merchant but if you look on the technical side side as well as the currency.
As you know Zimbabwe has evolved from different currencies. We used to have the normal Zimbabwean dollar with the ZW$ sign, we moved from that scenario to the ZWD, which was a change of currency. we then moved to use multiple currencies and then from there we are now moving to ZWL.
You see this evolution also impacts any business and we have not been spared. we have been impacted by all these changes but we have been able to adjust, especially when we look at the time of hyperinflation between 2005 and 2008.
Those were the worst years and I remember in those days, banks were submitting transactions in trillions and you know systems are made in such a way that they can only read up to 15 digits. Once you go beyond that it can crash. We had to come up with a mechanism where we were breaking down the files to accommodate the transactions that could still be processed.
For me this points to how committed we are because at that point any other company would have said ‘this is not sustainable, we are leaving’ but we never left the market. We even introduced mechanisms to work around it and made sure transactions are processed. So, I think that is one highlight I would like to give.
Post that, we moved to multi-currencies. I think things become normal and transactions were smaller and we introduced other innovative solutions. I think if you are in a crisis, there is a challenge in terms of introducing other innovations. probably you will just have one standard thing that works, but now we are in a situation where we are trying other things that we try in other markets, different technologies, for example, focussing on digital, talking about QR codes, talking about contact-less and even e-commerce. These are some of the initiatives we are now pushing.
MC: Talking about growth and transitions in currency, what can you say has been the impact on the volumes you have been moving.
JB: Customers spend what they have. That is your limit. If you do not have money you cannot spend. You look at two different transactions, domestic and international transactions.
We have been impacted more on the cross-border transactions because there are limitations in terms of access to forex. people would have wanted to spend more outside Zimbabwe, but there is a limit because of the availability of the forex.
I think that is where the impact on business is. If I compare 2018 and 2019, in 2018 we saw cross-border transactions growing in the region of 20%, but today we are on a negative growth. besides access, now there are even limitations with banks in terms of making the forex available.
MC: If you were to compare Zimbabwe with other southern African countries that you manage, what is your comment on cross-border transactions?
JB: If I compare with Botswana, for example, cross-border in Botswana is still growing at more than 20%. Zimbabwe was almost equal to all these other markets but in a situation where forex is limited you are disadvantaged.
Your growth is no longer what you want. yes you might have growth but it will not be growing as it should be. Your sort of growth will be at a decreasing rate. But if you look at these other countries, Zambia, Malawi and Botswana, they might have other challenges but they are not what we have in Zimbabwe so their growth is in the positive. Our growth is at a decreasing rate.
MC: Looking into the future what is your outlook for Zimbabwe?
JB: Cross-border is just one element. we have domestic which I have mentioned and we also have e-commerce where people do not have to travel anywhere. We are seeing people jumping onto laptops, phones and computers doing transactions.
That area still requires forex, but probably the amount of forex in that category is very small. For example, payment of school fees in international markets has been growing, which tells you that people are still sending their kids to learn outside the country.
They are looking at mechanisms to make those payments. We also look at what we call inbound perspective where we have visitors coming to the market and we have to facilitate the transactions.
We call that travel and we have seen growth in that area and it is measured by the number of tourists that came in. Last time I checked Zimbabwe was actually number four in Africa in terms of receiving visitors.
Up to July I think we received around 2,5 million visitors. we were above markets like Kenya. If we look at that perspective, travel is increasing. It is Visa who facilitate those global transactions and it becomes a very key pillar for Zimbabwe to focus on.
MC: In the myriad of challenges that you are facing or you have faced, what recommendations would you make to put Zimbabwe at par with its regional counterparts?
JB: There is a certain criterion that has to be established for all players in the payments industry. Making sure that the infrastructure is interoperable is very key. We have noted that we have certain payments which you can only use on specific infrastructure. It is inconvenient.
As a consumer I do not have to worry about such issues. Synchronising those payment systems and making sure they talk to each other is crucial. So what are we doing? We are engaging those payment system players to establish common user experience. Any payment system has to meet certain standards. Security is a concern. We spoke about increase in online payments.
You cannot increase payments if people are worried about security. We play a major role in online security. We invest a lot of money, skills in security, technology to prevent fraud globally. If you look at us, we employ more that 18 000 people and about 50% of them are focussing on technology and within that section there are those that are specialising on building tools to prevent fraud.
The world is moving into the digital space. We see more people getting interested in using phones in making payments. It is not only about making payments but we are beginning to talk about QR (Quick Response) codes. Here you can generate a code and send someone money or you can scan code and make payment. This is huge for markets like this one as it helps to grow faster in terms of accessibility.
Because you might have a form of payment but you have to travel 10 kilometres to use that as there would be no infrastructure. It is that other kind of investment that we are making, like how do you we expand that acceptance using partnerships with banks, fintech, and anyone who is participating in the payment systems?
MC: How much have you invested and how much are looking forward to invest in these initiatives.
JB: I have said we have been here for 20 years and I understand that people are interested in numbers. If I say it is one dollar or one million, it is just a number. I think the difference is about adding value. Are we seeing growth in tourism, cross-border electronic payments and so on. Zimbabwe is one of the countries ranging in the region of 1990s in terms of electronic payments, which is in the region of Sweden. It is a good thing. People may argue it is because of cash crisis, but I believe we should now sustain that level that we have reached.
So we have invested in consumer education. It is a lot of investment on how to use security and so on. It is what we are looking for. It is about speed and simplicity.