The Reserve Bank Of Zimbabwe’s governor, John P Mangudya last week declared all money transfer platforms to become just merely wallets, In a statement he designated Zimswitch as the new national payment switch with immediate effect.
This means all money providers will now have to connect to Zimswitch and integrate with them. Ecocash facilitates over 98% of all mobile money transactions posing a threat to the government as Ecocash had created it’s own ecosystem which was quite reliable to a certain extent. Ecocash was also somehow its own type of a bank which some employees even used to deposit salaries, it being a private player actually causes risk of controlling rates as they will be in the middle of supply and demand.
Having a national switch for all transactions was long overdue as it was once hinted long back and intensified sometime in 2019. The new imposed law weakens Ecocash as it will now have another party to report to unlike before.
Although this has much negative effect on Econet, it may also erode Netone’s OneMoney and Telecash as they were only sharing about 2% of the market so restructuring may put them on dead end.
Ecocash is one of the highest income generators for Cassava if not the highest, that poses a huge question mark if the market giant will just let it go, but even if it does, with its many pillars it can find alternative opportunities. Econet is now more of a technology company which now falls under Cassava and this gives it other wings it can rely on.
Lastly, it has always been easier than done, we also have to give it ample time to actually see if this move actually works because we cannot ignore the fact that Ecocash over 80% of all transactions taking place in Zimbabwe.