The Reserve Bank of Zimbabwe (RBZ)’s regulatory reviews on mobile money transactions have adversely impacted revenue for the leading player in the market– EcoCash.
Between April and September this year, the central bank made a cocktail of changes in the regulation of mobile money platforms, a move the regulator said was aimed at bringing sanity in the sector while stabilising the local currency.
The changes include the reduction in daily and monthly transactional limits on April 21, suspension of agents with transactions above ZWL$100,000 and requirement for their re-registration on May 4, suspension of the agent to agent transactions on June 4, the June 26 directive to integrate to ZimSwitch in line with SI 80 by 30 September 2020.
It also included the suspension of some EcoCash user categories and functions on June 27 and the August 25 revision of mobile money limits and permissible transactions and ban on the use of multiple wallets by individuals effective 8 September 2020.
“During the past six months, there have been a number of directives issued by the Regulators which have impacted on the group’s operations, mainly Ecocash,” said Charmaine Rose Daniels, Cassava Smartech Zimbabwe Limited company secretary, in the group’s trading update for the six months ended August 31, 2020.
Cassava, a division of telecommunication giant, Econet Wireless, is the holding company for EcoCash.
“Despite the reduced contribution of Ecocash to the group’s performance, the group’s revenue diversification strategy has seen some resilience spurred by the exponential revenue growth in the upcoming Insurtech and the Vaya Technologies businesses,” said Daniels.
“Ecocash revenue contribution has been reduced, both as a result of macro-economic factors referred to above, as well as the exponential growth in the Insurtech and Vaya Technologies business units.”
Daniels, however, said consolidated revenues for the six months ended 31 August 2020 (H1 FY21) increased by 443 percent in nominal terms, from the same period last year.
“This nominal increase was largely driven by an increase in transactional values due to hyperinflation,” explained Daniels.
“Transaction activity was subdued when the Covid containment measures were implemented nationally in March 2020.
Daniels said the RBZ’s regulatory reviews had necessitated delays by the group in the publishing of their annual report for the financial year ended 29 February.
“The group continues to comply with all the regulatory directives as they are issued,” he said.
“We continue reviewing our tariffs, which are approved by the regulator, maintaining a balance between inflation, business sustainability and affordability by our customers.”
The company secretary added: “The Covid-19 pandemic has ushered in unprecedented changes to the social, economic and health outlook of the world and the country. It has fundamentally changed the way people live, socialise and interact, and businesses simply have to change and adapt to the “new normal”. Global capital markets have been severely impacted as a result of the various levels of lockdowns which were instituted the world over since March 2020.”