The Reserve Bank of Zimbabwe, being the nation’s financial authority, shared in a recent press release that they anticipate online payment platforms to resume smooth processing of transactions by Friday, April 12, 2024. This comes as the country is transitioning to a new currency, the Zimbabwe Gold (ZiG).
In addition, the central bank highlighted that both the banking sector and payment systems providers have been making commendable progress in converting customer’s Zimbabwe Dollar (ZW$) balances to the new currency.
On April 5, 2024, this paramount financial institution issued a monetary policy statement introducing its gold-backed currency. This is a fresh measure to curb the inflation of the nation’s currency.
The declaration of the new currency by the Reserve Bank of Zimbabwe’s Governor, John Mushayavanhu, resulted in a disruption to banking across the country. This was due to lenders rushing to convert all Zimbabwe Dollar account balances into the newly instituted legal tender.
In the fallout of this announcement, online payment platforms in the country were unable to process transactions in the previous Zimbabwean dollar. Therefore, customers were left unable to make payment for goods and services online.
Payment providers and lending institutions in Zimbabwe explained that their inability to support online payments was because they needed time to adjust their systems to accommodate the new currency.
In accordance with the statements signed by the Reserve Bank of Zimbabwe’s Governor John Mushayavanhu, Zimbabweans were granted a transitional period of up to 21 days to exchange their Zimbabwe Dollar (ZW$) notes and coins for the new Zimbabwe Gold (ZiG).
It has been reported that some Zimbabweans have voiced concerns regarding what they perceive as a no-win strategy towards the implementation of the new currency.
The new currency, ZiG, is scheduled to be in circulation by April 30. However, customers will not be able to make online payments while their bank balances are transitioning to the new currency. This situation raises the question of how Zimbabweans are expected to execute online payments prior to the resumption of payment platforms on April 12.
Compared to other African countries, like Nigeria and South Africa, the adoption of online transactions in Zimbabwe has been slower. Much of the population continues to favor cash-based transactions using more stable currencies such as the South African Rand, Botswana Pula, and the US Dollar.
There is a prevailing apprehension among Zimbabweans that the government could potentially convert their money held in local banks into unstable currencies at any given moment. This fear stems from past experiences where citizens have lost their money to hyperinflation due to such practices by the government.
In recent years, Zimbabwe has seen a steady rise in the adoption of online payment solutions. Certain technologies have particularly stood out, including Innbucks, a system that allows customers to receive loose change at restaurants; Ecocash, a digital wallet; and O’Mari, a comprehensive application that combines mobile money, insurance technology, and investment technology products.
