Zimbabwe's Central Bank has directed that mobile money platforms curtail specific functions in a bid to curb high premiums charged by mobile money agents for cash withdrawals.

Digital payment platforms, including mobile money, continue to gain traction in the market owing to an ongoing cash shortage. However, authorities believe the platforms are now being abused with mobile money agents levying premiums of up to 50% for cash-outs from mobile wallets.

"All mobile payment system providers and merchants are hereby directed to discontinue cash-in and cash-out with immediate (effect)," the central bank said in a directive Monday afternoon, signed off by the Bank's deputy director for financial markets, J Mutepfa.

The financial institution added that the action had been necessitated by "economic agents engaging in illegal activities, abusing the cash-in and cash-back facilities thereby compromising public interest objectives" under Zimbabwe's national payments systems.

"Notable activities include the buying and selling of cash through mobile money agents at high rates above the approved charges for cash-in and cash-out with some economic agents now banking cash sales under the guise of cash-back services," said Mutepfa.

Zimbabwe's economy is battling a severe financial crisis, exacerbated by cash shortages at banks and runaway inflation which has seen prices rise in line with parallel market exchange rates.

The Central Bank has also directed other payment facilitators, including supermarkets, to immediately "discontinue cash-back" facilities whereby mobile wallet holders receive cash back after spending at an outlet.

"Banks, mobile payment system providers and other economic agents are reminded of the need to ensure that the entire system operate within the confines of law and enforce compliance," the Bank concluded.

Zimbabwe has continued to push digital finance as a solution to its cash shortage.

Curtailing cash-out and cash-in functionalities has been met with outrage locally and comes in the wake of further measures by fiscal and monetary authorities to curb illegal currency dealings.

EcoCash is the dominant platform in the market, while state-owned telcos NetOne and Telecel Zimbabwe also run One Money and Telecash respectively.