Following a series of warnings to unscrupulous mobile money agents, the Zimbabwean Central Bank (RBZ) has now with immediate effect banned all cash-in, cash-out and cash-back transactions by all mobile payment system providers and merchants.
The central bank also banned the use of the cash-back service when customers pay with cards at Point of Sale machines, saying shops were no longer banking cash through abuse of the facility.
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The sudden move by RBZ is undeniably a major blow to the advent of mobile money and financial inclusion.
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Zimbabwe is going through a serious cash crisis, with very few banks being able to provide depositors with physical cash. To get cash, Zimbabweans have been resorting to mobile money agencies who were illegally selling cash at a premium which reached 60% recently.
“Notable activities include the buying and selling of cash through mobile money agents at high rates above the approved charges for cash-in and cash-out with some economic agents not banking cash sales under the disguise of cash-back services,” said Josephat Mutepfa, the RBZ’s Deputy Director of Financial Markets and Payment systems.
Mutepfa said the actions had the “negative effect of distorting the pricing of goods and services.”
Strive Masiyiwa, the founder of EcoCash’s parent company, Econet Wireless, last week said the RBZ should take the blame for starving the market of cash, creating opportunities for arbitrage.
“EcoCash does not have any money. The cash [bank notes] belongs to the agent. Why is there such a shortage of bank notes in the first place, that it becomes possible to sell banknotes? Why? Where in the world does that happen?” Masiyiwa wrote on Facebook on September 20.
Masiyiwa said stopping EcoCash agents from dispensing cash was unlikely to stop the practice of people with cash selling it to those holding electronic dollars.
He added: “Why do the banks not dispense cash like banks around the world? Why? Let’s first understand the problem: This is simply symptomatic of hyperinflation. In case you have not realised, Zimbabwe has the highest hyperinflation in the world right now. If you address the causes of hyperinflation, this problem disappears.”
