EcoCash

Background

EcoCash was launched on 29 September 2011 and has since then witnessed an unprecedented growth of the facility since its inception. On its launch, the platform was essentially a mobile money transfer facility but there were plans shelved for the future meant to integrate the facility with services like DSTV, open up the platform to work with other banks other than Steward Bank which at the time was still known as TN Bank. ^[3] Since the launch of the product, it is estimated that the platform has handled over US$4,5 billion with over 170 million transactions processed.^[4]

Transacting on EcoCash

Customers can transact on EcoCash in 3 ways:

• Dial *151# on their Econet line
• Use the EcoCash app

Products Offered and Other Services

EcoCash Debit Card

The debit card was introduced on 30 July 2014. The launch of the card came as an added convenience to Econet customers already using the EcoCash facility as the card is automatically linked to the money in the EcoCash wallet. ^[5] Apart from being able to make payments across borders and also online, the card also relieved customers of the burden of having to travel around with large sums of money. Unfortunately, the card was disabled from making international payments following the cash crisis that started around 2016.

EcoCash Diaspora

Through a partnership with remittance company World Remit, EcoCash international money transfer product known as Ecocash Diaspora. When the platform was rolled out, it was scheduled to cater for remittances coming from 35 countries but the long-term plan was to increase the number of countries. The product was also commended for its affordability considering that other money transfer agencies such as Western Union were charging 20 pounds for handling a 300-pound transaction while World Remit which Econet had partnered would charge less than 10 pounds. ^[5] The service works almost in a similar pattern to a conventional EcoCash transaction by sending confirmation messages to both the sender and the receiver. The central bank was also reported to have agreed to raise the limits from US$3 000 to US$10 000 for people who have accounts and also to approve transactions that are above limits on an individual basis to allow greater convenience. EcoCash Diaspora also came with other side benefits which would allow the sender in the diaspora to pay utility bills directly, and move money from their bank accounts to the wallets of relatives in Zimbabwe. ^[6]

EcoCash Payroll

In December 2013, Econet through its mobile money transfer platform EcoCash announced the launch of EcoCash Payroll and Bulk Payments. Under the platform, small to medium scale companies would be able to make salary payments to their employees without having to go to banks and make huge sum transactions, the facility was also being offered to companies free of charge. ^[7] The facility allowed companies to make instant payments to their employees as long as their wallet balance had the necessary funds. The move was a welcome especially in light of a story in which a Harare based company was said to have lost US$100 000 meant for salaries. Companies which included the likes of Food and Agriculture Organisation (FAO), fertiliser producer Windmill, Harare City Council, medical aid society Cimas and the Cotton Company of Zimbabwe were already using the EcoCash Payroll system. ^[7]

Bill Payment Services

In March 2012, Econet announced that all its customers on the EcoCash platform would be able to pay their utility bills via the platform allowing them to transact without having to walk to the premises of the service provider. For a customer to be able to make bill payments on the platform, they need to have an account number with the particular biller they will need to enter this account number when making a payment to the Biller account. Under the arrangement, water bills, DSTV payments and even groceries could be purchased without the use of hard cash. The move was hailed by many people considering the country's seemingly perennial liquidity crunch. The partnership between Econet and DSTV was also hailed by many people because it allowed people to make DSTV subscriptions in the comforts of their homes not to mention instant activation for those utilising the facility.

Airtime Purchase

Through the EcoCash platform, subscribers were able to purchase airtime for their phones as long as they had money in their EcoCash wallet. The facility offers convenience in that subscribers could buy airtime at any moment thereby averting the disappointment of shops closing or other retailers which sell Econet airtime. The airtime facility also allowed subscribers to buy airtime for other people on the Econet network.

EcoCash Business Wallet

In June 2018, EcoCash introduced the Ecocash business wallet, a wallet dedicated to business and is meant to give them more control of their funds. Businesses were able to make and receive payments directly on their business wallet. ^[8]

Awards

Best mobile money award^[9]

Problems experience on the platform

Cash crisis fees (2017)

In 2017, following the start of the cash crisis, it became increasingly hard for customers to cash out. Resultantly, agents started charging an extra fee to allow customers to cash out. The fee fluctuated between 10% and 25%. ^[10]

Selling of Cash

Starting in 2016, following the shortage of cash in the country and the introduction of Bond Notes, EcoCash Agents started charging a commission for cash-outs (withdrawls). As a result cash and electronic money had 2 different values. Initially, agents would charge about 5% for an EcoCash cash-out (for example to get $10, an EcoCash customer would "cash-out" - that is send to the agent - $10.50). Cash continued to attract an even higher value as the cash crisis continued through 2017, 2018 and 2019. In September 2019 agents charged about 60% for cash.

RBZ Ban of Cash-ins and Cash-outs

The high percentages for cashouts by agents resulted in a banning of the cash-ins and cash-outs by the Reserve Bank of Zimbabwe on 30 September 2019. The RBZ cited Section 10 of the National Payments Systems Act - Chapter 24:23 as the basis of the ban. The ban was intended to stop the trading of cash on the black market. The move however only resulted in cash getting an even higher premium of about 100% on the streets, even outside the EcoCash platform.

EcoCash contested the ban at the Harare High Court noting that the abuse of the EcoCash system was by some customers and had nothing to do with any faults in the system itself. The RBZ lifted the ban on 2 October 2019. ^[11]

Relaxation of the daily limit

Back in September a seriously prohibitive ZW$5000 daily limit was placed on EcoCash subscribers. The huge blow disincentivised people from using EcoCash since it meant one simply couldn’t make certain basic payments using the mobile money service. EcoCash and OneMoney announced that the limit would be relaxed – from ZW$5000/day to ZW$35 000/week. Previously you could only use a maximum of 35 000/week but with a daily limit of 5 000. Now you would be able to use ZW$35 000 in one day if you wished.

This meant mobile money users and regular consumers would be able to use their money with more flexibility and some of the use cases which were unavailable (e.g paying for certain consumer internet packages) would now be available once again.

Interestingly, there was still going to be some restrictions meant to discourage money laundering. There was going to be a ZW$5000 limit per transaction which meant if you transacted above that threshold you would have to do so multiple times. ^[12]

References