PAYNET Zimbabwe (Pvt) Ltd, a subsidiary of Cambria Africa, is terminating its fee-sharing arrangement with EcoCash Zimbabwe for the use of bulk payment software following the latter’s fallout with the central bank, businessdigest has learnt.
A total of ZW$1,6 million (US$64 000) remain in EcoCash’s trust account at Steward Bank.Paynet Zimbabwe, which also suspended its services to Zimbabwe’s banks in June 2019, had partnered EcoCash on bulk payments but is now terminating the relationship.
A dispute erupted between the Reserve Bank of Zimbabwe (RBZ) and EcoCash over the suspension of thousands of lines for its agents by the central bank. EcoCash took the RBZ to court over the issue. However, the Econet subsidiary lost the case.
As a result of the dismissal of the court application, Cambria CE Samir Shasha says the company has found itself with no choice but to withdraw EcoCash payment services to clients served through the bulk account dedicated to it by Zimbabwe’s largest mobile money service provider.
“Client funds of ZWL$1,6 million (US$64 000) remain in EcoCash’s Trust account at Steward Bank. Paynet has requested the assistance of Steward Bank and EcoCash to either return these funds to its clients or enable Paynet to finish funding the mobile wallets of the intended recipients,” he said
“Paynet also provides EcoCash clients, holding their own bulk payment accounts, with proprietary software allowing them to directly interact with these accounts to process bulk payments. EcoCash clients, whose access to bulk payment accounts has not been closed, are able to continue using Paynet’s standalone software to manage their bulk payments.”
While Paynet had high hopes of recovering its market presence through EcoCash, it now says the potential liability and reputational risk outweigh any potential for improved commercial optics.
The court ruling over the EcoCash agents saga is expected to contribute to a sharp fall in EcoCash revenue as some of the clients who had been relying on this system will have to find alternative systems to use.
Ecocash spokesperson Fungai Mandivheyi told businessdigest that there have been changes to channel partner limits in line with the risk-based approach.
“We continuously engage our regulators on such changes, taking into account the macro-economic environment and respective customer peculiarities. Any changes are communicated to the affected customers,” he said.
Meanwhile, South African payroll solutions company Paywell SA, caught up in a breach-of-contract wrangle, has cancelled Cambria Africa subsidiary Autopay’s agency agreement following a legal dispute raised by the latter.
The agency agreement cancellation is effective July 2020 but the licence continues to be active for 12 months until end December 2020 in accordance with its Paywell software licence agreement.
Autopay is a payroll management business offering a full-service payroll bureau, software and licensing of payroll and human resources products to major corporates and online small and medium enterprise (SME) payroll processing.
Details emerged that Autopay discovered that Paywell SA, the owner of the payroll software licensed to Autopay in terms of an exclusive agency agreement, has been targeting the Zimbabwean market through distribution channels other than theirs.
Following a legal dispute, Paywell SA gave notice to cancel its agency agreement with Autopay.Shasha told businessdigest that the agreement was that Autopay’s dominance in the market was to be exclusive. However, Paywell chose to interpret the fall in revenue as lack of dominance.
“The issue was breach of contract — our agency because of our dominance in the market was to be exclusive — they chose to interpret the fall in revenue (as opposed to the number of licences) as lack of dominance.
The irony is they rejected an offer to buy them and now we have Covid-19,” he said.Autopay traded profitably during half-year 2020 although the number of payslips processed decreased 10,18% to 170 665 from 190 000 in half-year 2019.
Shasha said the other irony was that the RBZ was still sitting on the renewal application after having approved payment of licences in foreign currency to Paywell for almost 30 years.
“The RBZ has to authorise payments for subscription services. Paywell has provided payroll subscription services for some time to Zimbabwe — back to the times of CF Tully. Our application to be authorised to make payments to Paywell through FBC remains outstanding,” he said Shasha said unless the company renews its licence with Paywell for the operation of its salary bureau, it will source or develop an alternative platform to migrate its significant client base from the Paywell platform. He said the company had since commenced the process of engaging alternative software providers in addition to evaluating the merits of developing a proprietary payroll software solution.