Good news for depositors

THE Reserve Bank of Zimbabwe (RBZ) is set to review electronic transaction fees further downwards, in a move aimed at encouraging depositors to use plastic money in the face of a worsening liquidity crunch.

Central bank governor John Mangudya last week said in the wake of pressing cash shortages, the apex bank was working on a raft of measures to promote the enhanced use of plastic and electronic money which currently accounts for 70 percent of retail transactions.

“The measures include charges or levies on plastic money and electronic transactions being reviewed downwards.
“In order to maintain this positive development and for more convenience to the transacting public, the bank is putting in place measures to make the use of plastic (including international credit cards) and electronic money cheaper and more attractive than using cash and to ensure that bank account holders are bona fide law abiding and tax paying citizens,” he said.

This comes as the country is currently battling a debilitating cash shortage and has introduced bond notes in a bid to tight the situation.

In June last year, the central bank issued a directive for banks to reduce bank charges on electronic transactions leaving electronic fund transfers attracting charges of between $0,33 to a maximum of $2,10, in an ambitious drive to promote plastic money transactions.

In the same drive, the Point of Sale (Pos) footprint in the country has increased 11 percent to 32 540, as RBZ moves to promote cash-lite transactions and ease cash shortages.

Pos machines are devices that facilitate for payments made at swipe machines using plastic money in the form of debit and credit cards

Data from the apex bank shows that the number of Pos increased from the 29 000 registered at the close of 2016, while figures gathered from the Confederation of Zimbabwe Retailers (CZR) also indicate that the country’s total Pos infrastructure was pegged at 20 000 at the end of July 2016.

As the country’s cash shortages peak, the RBZ has resorted to several measures to minimise the use of hard cash, with increasing Pos infrastructure at the core of this thrust.

Last month, the apex bank pegged the maximum “cash back” withdrawal at $20, arguing the measure was aimed at curbing cash hoarding.
Meanwhile, Pos transaction volumes surged 260 percent in 2016 on the back of the cash crisis after the country processed Pos transactions worth $2,9 billion in 2016 from $1,7 billion processed in 2015.

The 2017 Monetary Policy Statement indicated that there were 52,41 million Pos transactions in 2016 up from 14,54 million in 2015.

This was the first time since the adoption of a multi-currency system in 2009 that the value of Pos transactions exceeded ATM values, indicating another migration from ATM activity which is also a reflection of cash circulation through registered banks.

Market experts anticipate Pos volumes to surge again this year on the back of a deepening cash crisis and increased Pos infrastructure.

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