Zimbabwe’s mobile money segment had a difficult quarter to June 30, 2020 as authorities tightened the screws on errant operators.
Over the past few months, the Reserve Bank of Zimbabwe (RBZ) has placed a number of restrictions on how mobile money platforms operate.
In May, the central bank directed that banks holding mobile money trust accounts are now only allowed to let their account holders pay into those trust accounts and have to enforce the know-your-customer standards of the banking system.
And in August, the financial sector regulator introduced a policy that limits mobile wallet users to only account per individual. Accordingly, mobile money operators were directed to close all multiple accounts owned by individuals.
To this extent, latest stats from the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) showed that there was an overall decline in the number of mobile money transactions in line with the decline in active subscriptions.
Cash-in and cash-out transaction also declined and this is attributable to the cash shortages in the economy, said POTRAZ.
“On the other hand there was considerable growth in the value of cross-network as well as airtime, bill and merchant payments.
“The growth in the value of bill and merchant payments is attributable to a number of factors such as the increase in the scope of services that can be paid through mobile money as well as the general increase in the prices of goods and services,” added the telecommunications sector regulator.
“The national lockdown also necessitated the remote payment of goods and services via electronic channels such as mobile money. The full implementation of mobile money interoperability as mandated by Statutory Instrument 80 of 2020 on Banking Money Transmission, Mobile Banking and Mobile Money Interoperability.
“Regulations will result in increased growth in cross-network transactions.”
Meanwhile, the latest POTRAZ report showed that total mobile network revenue grew by 45.8 percent to record $3 billion in the quarter to June 30, 2020 from the previous quarter.
The growth in revenue was due to the increase in tariffs as well as the growth in internet and data usage.
But operating costs were higher.
Operating costs exclusive of foreign currency losses grew by 42 percent whereas operating costs inclusive of foreign currency losses grew by
217.7 percent.
“The increase in operating expenditure is attributable to the inflationary operating environment,” said POTRAZ.
“The telecommunications sector is also capital intensive and heavily reliant on debt financing, the fluctuations in the exchange rate have resulted in huge exchange losses on debts to be serviced.”