RBZ may sanction Econet | The Herald

via RBZ may sanction Econet | The Herald December 23, 2013

THE Reserve Bank of Zimbabwe might take punitive measures against Econet Wireless if the company insists on refusing banks

unfettered access to transact on its mobile network.

The mobile phone operator is currently entangled in a bruising feud with banks over its reluctance to entirely open up its network to allow them to roll out mobile money services to clients.

Econet argues that the gateway to mobile phone users was not the network, but its mobile money transfer service, EcoCash, which all financial institutions were free to use. Banks say they have no issues with other smaller operators, Telecel and NetOne.

“Banks accuse Econet of playing the game unfairly as evidenced by its unwillingness allow them access to the mobile money platform for payment and remittance purposes,” said a banking sector source that requested not to be named.

Unfettered access to the network would provide banks the opportunity to roll out financial products to more than eight million of the mobile phone operator’s subscribers.

Ostensibly, Econet is unwilling to open up its platform as that would mean competition for EcoCash, one of its fastest growing business units expected to anchor Econet future growth in the wake of declining growth in its core business of voice.

While Econet Wireless has thus far succeeded in keeping the aggrieved banks at bay due to perceived lack of relevant legislation, it has emerged that the RBZ was empowered to regulate mobile money activities under the National Payment Systems Act.

Banking sector sources said while the RBZ had legal clout to regulate mobile all paper and electronic payments including mobile banking, it said it was difficult to legislate new products, hence failure to resolve the impasse between Econet and banks.

Banking sector sources said the central bank resolved to engage Econet Wireless to resolve the issue, failure of which will see monetary authorities punitive.

The RBZ was in the process of coming up with new payment systems regulations deal, especially with mobile payment; hence the banks would be called to make input.

Presenting the 2014 National Budget, Finance Minister Patrick Chinamasa said: “The Reserve Bank is reviewing the regulatory framework to cover all aspects of mobile banking.”

As part of the initial measures towards effectively regulating Econet’s mobile service operations, the RBZ reportedly instructed the company to form a separate unit to oversee

EcoCash.

EcoCash is now being administered by a separate company, Econet Services, entirely owned by the country’s single biggest mobile phone telecommunications operator.

At the meeting with RBZ, banks said that access to the mobile network platform would result in charges being levied at the moment in mobile money transfers going down.

Meanwhile, notwithstanding the positive impact of mobile banking services on the welfare of the then financially excluded members of our society, Minister Chinamasa said this product should conform to the tax principle of fairness, hence the current tax on similar products such as automotive teller machines and point of sale should apply.

 

COMMENTS

WORDPRESS: 4
  • comment-avatar
    james joseph 8 years ago

    Ko Econet ndiyo yega here ngavashandise net one or telecel

  • comment-avatar

    Zanupf is about to do a mutumwa mawere on strive masiyiwa

  • comment-avatar
    Jenandebvu 8 years ago

    Why not internet banking whc only requires internet access as oppose to mobile. Or econet bankking. EcoCash is a product of many years of research, nitch and aggressive marketing, banks can try it n fail. Econet has no case to answzer

  • comment-avatar
    Chanisa 8 years ago

    All public money transfer systems must be interconnected for the convenience of the public. Econet can still make money from any transactions over an interconnected network. Much more money perhaps.