Cash crisis: Zimbabwe cuts bank charges in push for electronic payments
CHARGES for electronic payments have been cut after an agreement between the Reserve Bank of Zimbabwe, banks and providers of payment platforms, the central bank announced on Tuesday.
RBZ announced it had reached an agreement with banks and service providers to cut fees “in order to promote and encourage the use of electronic bank services”.
RTGS transfers will now cost $5, down from $10 per transaction. Point-of-sale (POS) transactions of up to $10 will cost 10 cents, while a POS transaction of above $10 will be charged a maximum of 45 cents. If a customer uses a POS from their own bank, they will be charged 20 cents. ATM charges, which varied between banks previously, will now cost a maximum $2.50. Monthly administration or service fees are set at a maximum of $5.
Reserve Bank of Zimbabwe (RBZ) has been battling to increase the use of bank cards and other electronic payment systems as part of its efforts to respond to a deepening cash crisis. However, high charges levied by banks have seen the public stay away from plastic money, preferring cash, which is now in short supply.
“It is envisaged that the reduction in transactional fees will go a long way in promoting the plastic money which is essential to move the economy towards a cashless society and to complement the current financial inclusion efforts,” the central bank said.
Banks have been reluctant to cut back on fees and charges, which now account for a large part of their earnings as banks pare down their core business of lending due to the rising risk of default.
A 2015 survey by FinTrust, which analyses banking trends in Africa, found that 70 percent of Zimbabwean adults do not have a bank account. Of the five million adults that are not banked, 74 percent percent said they do not have the money to save, 28 percent said they could not maintain the required minimum balances, while seven percent cited high bank charges.
Mobile money is now the largest mover of transactions in the economy, with RBZ stats showing it accounts for 89 percent of the number of transactions in the economy.
According to the latest available data, $402 million worth of retail transactions went through POS systems in the quarter to December 2015, compared to $420 million in the same quarter of 2014. As at December 2015, Zimbabwe had 16,363 POS terminals in use, and 556 ATMs.
At the close of 2015, there were 2,365,160 debit cards in issue in Zimbabwe against 3,613,781 in December 2014. The Source
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