I will begin by giving you a brief background on Econet-owned EcoCash. EcoCash is an innovative mobile payment solution that enables Econet customers to complete simple financial transactions such as sending money to loved ones, buying prepaid airtime for yourself or other Econet subscribers and paying for goods and services. EcoCash was launched on September 29, 2011 and has since then witnessed unprecedented growth of the facility since its inception.
The facility has grown in leaps and bounds since its inception. It is arguably the largest mobile money transfer platform with six million active subscribers and 26 000 agents countrywide and considering the huge sums of transactions that the platform handles on a daily basis. My article is going to highlight on some of the barriers Ecocash has managed to overcome since its inception and how other businesses and entrepreneurs could also learn from it.
I. Trust– Research has demonstrated that perceived trustworthiness includes three elements: ability (are you competent?), integrity (are you honest?), and benevolence (do you care about my interests?).
My research also found that the only industry trusted less than finance and banking (and by just a hair’s breadth) is the media. In Zimbabwe if we were to have a gauge to measure, surely you would realize that trust has significantly eroded. Now the question is, how has Ecocash gained the trust of people? Simple. The message is clear: only if you signal benevolence clearly – indicating you care about the other’s interests – people reciprocate, leading to long-term and trust-building relationships. Trust will be built only when clients perceive that benevolence, truly felt, is underlying the decisions and actions of their service provider. The ecocash customer service is readily available and accessible by dialing 114 or visiting any nearest Econet shop for any ecocash related enqueries.
II. Competition– Econet’s EcoCash mobile money platform faces competition from Telecel with its TeleCash, NetOne with One Wallet and financial institutions that have mobile money innovations include Brainworks with its GetCash, FBC Bank (FBC mobile application), CBZ Bank (CBZ Touch), and ZB Bank (Cash Back), among others. Ecocash faces competition from both angles but still manages to hold the fortress.
Econet is Zimbabwe’s largest telecommunication firm in assets and investment. Econet grew its subscriber base to over 10million, latest data show. In October statistics revealed by the Postal and Telecommunication Regulatory Authority of Zimbabwe (Potraz) showed that Econet subscriber base increased by 7.4% from 9.2 million in the first quarter of this year, 2016, to 10million in the second quarter. 10millions subscribers compared to NetOne- 5,64million subscribers and Telecel – 4,2million subscribers. Econet’s huge subscriber base also gives Ecocash a boast in its dominance in the mobile money platform. The mobile money platform is the solution to lack of access to banking services by the majority of Zimbabweans.
In Zimbabwe the majority do not hold bank accounts, that in the previous surveys revealed that over 60% of the country’s adult population have no bank accounts, since many are unemployed and a significant number of people have lost trust with the banking system with some opting for their salaries being directly channeled to their Ecocash wallets.
EcoCash has managed to bring convenience, efficiency and accessibility to many Zimbabweans, so in actual fact it is the biggest competitor in the game, a huge threat to these other financial institutions and mobile phone platforms. A big lesson to other financial institutions, i.e., local banks, that losing trust from clients is catastrophic. This loss of trust is so severe that it becomes a financial stability concern, hence, inevitably leading to the collapse of the business.
III. Fear Of The Unknown – In June when bond notes were announced to start circulating in the market in August, 2016, to some extend it caused panic to some people, in fact many people that resulted in them withdrawing all their savings fearing that their money would risk become worthless papers. That fear of the unknown, also contributed immensely to the cash crisis, since, withdrawals were emanating more than savings were.
Going back to our first point on trust, though to be focusing on one perceived trustworthiness element – benevolence (do you care about my interests?) I remember myself banking with AfrAsia Bank Zimbabwe Limited (formerly Kingdom Bank), further been placed under liquidation by Reserve Bank of Zimbabwe and later on collapsed. From that terrible experience I went through trying to access my savings, from standing in a queue the entire day only to be given a $10 note with normal withdrawal charges still applied and so forth, made me question if bankers realize how important benevolence is.
A remark by an investment banker I recently spoke with may be very telling in this respect. He told me that in his profession benevolence does not exist, nor is it necessary. Why would he think that? Some of my own recent research indicates that it may be because he spends a significant portion of his day thinking about money.
EcoCash has managed to beat that barrier of fear of the unknown as many I have questioned feel a lot much safer sleeping with their entire savings in their ecoCash wallets than in a bank. Having their money in their ecocash wallets makes them feel closer to their savings than in a bank, and their money secure. It’s that fear of the unknown that one day you may suddenly wake up your bank making headlines that it has gone under liquidation, just like what would happen in the past and you know “once bitten, twice shy.” As for our local banks, hiring more compliance officers is not going to help. Instead, banks must recognize that winning the trust of their clients will take more than complying with the law.
“Trust doesn’t come with a refill. Once it is gone, you probably won’t get it back, and if you do, it will never be the same and that’s a fact.”
IV. Liquidity Crunch– The liquidity constraints had hit hard, making innovation a necessity. Ecocash way of trying to curb the liquidity constraints was that of encouraging more online transactions, payments, etc, so to ease the cash shortages in the country. The number of companies using EcoCash to pay their workers has raised dramatically because of the liquidity problems facing some banks.
Econet Wireless CEO, Douglas Mboweni once highlighted that,”…we believe EcoCash is the solution to the current liquidity challenges and can assist the country into mitigating the cash shortages. Our focus will also be growing mobile financial services through promoting Ecocash as a premier mobile merchant payment solution.”
Cashless solutions such as the recently-unveiled platform to buy Zesa electricity tokens by dialing EcoCash USSD *151#, Select “Make Payment” Select “Pay ZESA” Select “Buy Token” Enter “Amount” Enter “Meter Number” Confirm and Get Your Token.
EcoCash continues to invest in appropriate technologies that lessen the reliance on cash for day-to-day transactions like POS [point of sale] machines and other electronic platforms will also assist in alleviating the liquidity crunch. The Ecocash platform offers debit card, payroll, services, bill payment, airtime purchases and make payment at over 47 million MasterCard point worldwide.
V. Banking Sector – The recent growth of mobile money worldwide has enabled millions of people who were otherwise excluded from formal financial systems to now perform financial transactions relatively cheaply, securely and more efficiently. Researches have shown that improvement number of adults with accounts from 2011 to 2015 was aided by mobile money. Mobile money has gained popularity due to their convenience, their capability to reach the unbanked adults such as the poor, women, youths and those living in the rural areas.
Econet-owned Ecocash mobile money platform have since proven to be a success comparing them with the banking sector. Ecocash has managed to compete with the banking sector. EcoCash advantages over the bank includes; Accessibility being a critical success factor for any service. A subscriber does not need to travel long distances or fork out any money to access an agent and perform agent centered transactions. The world is currently facing an economic crisis and most people are living on a hand to mouth basis.
Furthermore, banks have a restrictive approach when it comes to on boarding customers. When one approaches a bank with a request, be it a new account opening or a loan request, they are subjected to rigorous checks and processes which frustrate customers. This “who is eligible to be my customer” approach results in a low on boarding rate for banks. Banks tend to focus on markets with large scale transactions as a component of their competitive and cost effective business strategy and with such strategy gives EcoCash total monopoly in providing informal financial services.
In addition, EcoCash has managed to move ahead after banks have generally been found lacking in the areas of innovation, technology utilization and adoption. I am thinking you should read Vinod Sharma’s article: – Why Banks Will Never Be Successful In Mobile Money Or Payments. It’s an interesting article.
VI. Adaptation To Current Trends– The best thing about EcoCash is how quickly it adapts to current trends. It adapts to current trends just for its survival and that is what every successful business requires for its survival: – Adaptation. Nokia failed to adapt to new current trends resulting in one of the once biggest brands falling off the radar.
During the press conference to announce NOKIA being acquired by Microsoft, Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly.
Nokia has been a respectable company. They didn’t do anything wrong in their business, however, the world changed too fast. Their opponents were too powerful.
They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival.
The message of this story is, if you don’t change, you shall be removed from the competition.
In Zimbabwe the liquidity constraints had hit hard, making innovation a necessity, hence, Econet Wireless Zimbabwe recently launched the EcoCash Rand Wallet on its mobile money platform to give an alternative currency in the wake of cash shortages prevailing in the market.
Econet Wireless CEO, Douglas Mboweni said, “….the introduction of a multi-currency wallet is another step towards meeting the country’s vision of becoming a cashless society and of easing liquidity in a multi-currency regime.” EcoCash General Manager, Natalie Jabangwe said, “…at home, we have been marred by cash shortages, but let me tell you that this has been the best opportunity for EcoCash. We should be able to provide convenience and a choice to our customers. The EcoCash Rand Wallet allows customers to cash in and out, send money, offers merchant services, payee and bulk payer, and bill payments using the South African rand.”
The launch of the new product comes as there is a shortage of US dollars in the country. Adopting the rand comes when four months ago, in August, exports to South Africa totalled $153,98 million (R2,09 billion). Exports account for 60% of liquidity in the country. Therefore, South Africa is our country’s largest trading partner accounting for 60% of total trade.
There is growing use of mobile money for savings, credit, insurance and even tax. For instance, Tanzania accepts tax payments sent through mobile money. In Afghanistan, payment of salaries and wages for police and other officials were done through a local version of M-PESA.
In conclusion, and most importantly, remember that a strong brand should be ubiquitous and ever evolving and this is what Econet- owned Ecocash is all about.
