DIGITAL financial services (DFS) have become an integral part of modern economies, enabling people to deposit, withdraw, borrow, transfer money and pay for goods and services using mobile phones, computers and bank cards.
In Zimbabwe, platforms such as EcoCash, OneMoney, Omari, commercial banks and insurance companies now mediate much of daily economic life, from retail purchases to remittances and savings.
The rise of DFS has unquestionably transformed the financial sector. Innovation has accelerated, product choice has expanded and, critically, financial inclusion has improved.
Groups previously excluded from formal finance, particularly rural communities, young people and women, now participate in the financial system.
This matters because when savings are held outside formal institutions, the pool of funds available for lending shrinks, constraining investment and economic growth.
Yet while DFS are essential to economic development and consumer welfare, the structure of the market matters.
If the sector becomes dominated by a few powerful players, the same tools that enable inclusion and efficiency can also entrench exploitation, stifle innovation and undermine long-term growth.
Zimbabwe’s DFS ecosystem, therefore, requires vigilant oversight to ensure that competition remains fair, open and dynamic.
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Competition concerns in DFS
One of the most pressing concerns is exploitative pricing, particularly in segments where a small number of providers wield significant market power.
There are persistent complaints that some banks and mobile money operators charge unreasonably high fees for even basic services, such as balance enquiries.
Market power is amplified where providers offer “must-have” services, or where consumers face limited alternatives.
High prices and poor service quality become more likely where providers can illegally coordinate strategies, where switching costs are high, and where products are strongly differentiated.
Cartel-like behaviour, although unlawful, is not unknown in concentrated markets. In Zimbabwe, switching DFS providers can be costly for consumers.
Customers are often required to re-register from scratch, losing valuable transaction histories that could otherwise support credit scoring and access to loans.
While interoperability has improved in recent years, for example, allowing transfers between EcoCash, OneMoney and banks, switching costs remain significant.
Upstream market power also poses risks. Many fintechs and banks rely on USSD platforms to reach customers without smartphones, particularly in rural areas.
These USSD services are supplied by mobile network operators (MNOs), who function as wholesalers. International experience shows that MNOs can overcharge for USSD access while providing poor service quality, undermining downstream DFS providers.
Such practices can entrench MNO dominance, especially when they compete directly through their own DFS products.
Excessive or discriminatory USSD pricing ultimately harms consumers, who bear the cost through higher transaction fees.
Exclusionary conduct is another concern. Control over critical infrastructure can be used to block new entrants. Access to Zimswitch, Zimbabwe’s national payment switch, is vital for DFS providers seeking access to Automated Teller Machines and point-of-sale infrastructure.
If decisions about access remain at the discretion of a consortium of incumbent banks, emerging fintechs may be unfairly excluded. Reduced competition inevitably leads to weaker innovation, higher prices and poorer service.
The restrained competition, which arises from such actions, will be felt through reduced innovation, higher consumer prices and poorer quality of services, in the local DFS space.
Exclusive dealing has been a substantive problem in the local DFS space, particularly where certain providers have gone on to abuse their first-mover advantage in the industry.
This includes situations where dominant DFS providers have been unwilling to share their agent networks, for example. Such exclusivity makes it harder for emerging players to reach their own clients, as they would need to train completely new agents for “cash in/ cash out” services.
When Ecocash agents are not permitted to provide their agent services for OneMoney, Omari or Mukuru, that can be problematic for the DFS players and overall consumer welfare.
In essence, this has a tendency to limit the entrant of new service providers in the DFS sector. It restrains convenience for customers, makes it expensive for new providers to build their own exclusive agent network, keep prices of DFS products high and limits the profits that can be made by the agents themselves.
The refusal or inability to share access to customer account data among DFS providers makes it hard for emerging players to provide new, innovative and competitive products, which address prevailing customer problems.
In a market where, for example, Ecocash cannot share information on customer accounts to its emerging and established competitors (Omari, Mukuru), it can be difficult for competitors to provide new products which address consumer pain-points (struggles), within the industry.
This lack of data portability directly undermines consumer welfare. When customers switch from one DFS provider to another, the inability to transfer their transaction history limits the benefits that both the customer and the new provider can derive from the relationship.
By contrast, enabling data sharing, with explicit customer consent, would allow new providers to immediately assess risk, tailor products and offer competitive services.
Customers could gain faster access to DFS-facilitated credit, lower transaction charges, reduced interest rates or insurance premiums, and more customised product offerings upon switching.
Such dynamism is critical to enhancing consumer welfare, boosting productivity across the DFS sector, and supporting broader economic growth.
Regulatory responses
The discussion above outlines the key challenges facing Zimbabwe’s digital financial services sector, alongside the opportunities and risks that accompany its rapid expansion.
What follows is an examination of the policy tools available to address these challenges and steer the sector toward greater efficiency, inclusion and competitiveness.
To curb exploitative pricing, Zimbabwe’s competition authorities and financial regulators must maintain continuous and rigorous oversight of developments in the DFS market.
Regulatory institutions should remain accessible to downstream DFS providers and consumers seeking redress over excessive charges.
Where pricing is demonstrably exorbitant, regulators must intervene decisively to rein in fees and restore balance. Experience from countries such as Kenya and Nigeria shows that restraining excessive profit margins can help normalise markets, stimulate competition and deepen financial inclusion.
Persistently high DFS charges risk pushing consumers back into cash-based systems, shrinking formal savings and reducing the pool of credit available for lending. The resulting contraction in financial intermediation ultimately undermines investment and economic growth.
Industry regulators must also strengthen surveillance and enforcement where dominant players engage in exclusionary conduct that restricts the growth of new and emerging DFS providers.
One option would be for the Reserve Bank of Zimbabwe to acquire a controlling stake in critical payments infrastructure such as Zimswitch, thereby ensuring open, transparent and non-discriminatory access for all licensed providers.
Such an intervention would lower barriers to entry, attract new participants into the DFS market and promote competition, innovation and improved consumer welfare.
Should direct ownership prove unfeasible, the central bank could instead subject all rejected applications for access to Zimswitch to regulatory review, limiting arbitrary exclusion by incumbent owners and widening access to the payments ecosystem.
Agent exclusivity can likewise be addressed through legislation. Allowing agents to serve multiple DFS providers would prevent dominant firms from locking up distribution networks and raise efficiency across the sector.
Under such a framework, an Omari agent could also provide services for EcoCash or Mukuru, subject to contractual arrangements and minimum training requirements.
This would reduce the costs faced by new entrants, expand consumer choice and increase income opportunities for agents. Crucially, shared agent networks would also enable DFS providers to reach unbanked and financially excluded populations more effectively, reinforcing the link between financial inclusion and sustained economic growth.
Data portability should also be mandated in law. With explicit customer consent, transaction and account histories should be transferable between DFS providers, allowing new entrants to compete on equal footing from the outset.
In addition, anonymised, aggregated industry data should be made accessible to licensed providers on a wholesale basis.
Broader access to high-quality data would support the development of innovative, consumer-centric products by enabling more accurate assessments of customer behaviour, risk profiles and spending patterns, ultimately strengthening competition and consumer welfare across the DFS ecosystem.
Authorities should also ensure that emerging DFS products are increasingly tested, with designated control populations, for their real life relevance.
Offering DFS providers more access on these controlled platforms, which are called “regulatory sandboxes”, can be beneficial for the development of new products in the DFS space.
“Sandboxes”, allow DFS providers to transparently recruit a select few customers, whom they can use to test the efficacy of their products, before rolling them out on the overall mass market.
Tutani is a political economy analyst — [email protected].
