Zimbabwe’s EcoCash moving bulk funds from banned agent lines
Digital solutions provider Cassava Smartech’s mobile financial service, EcoCash has begun liquidating bulk funds held by mobile finance agents in compliance with the Zimbabwe Reserve Bank’s directive.
In October 2019 the Central Bank ordered mobile payment systems and merchants to discontinue cash-in and cash-out services.
In June 2020 the government directed that individual mobile money transactions will be processed normally, while merchant lines can only facilitate incoming transactions and are compelled to move money into bank accounts to make payments. All agent lines were suspended.
EcoCash subsequently closed all agent lines and the Reserve Bank tightened foreign currency-related regulation.
The Central Bank said the liquidation of funds can only be done after the Bank’s Financial Intelligence Unit (FIU) was satisfied with the legitimacy of the source of the money.
Ecocash went on to remind clients of the 2% Intermediate money transfer tax payable.In October 2018 the government introduced the intermediate money transfer tax (IMTT), also known as the '2c tax'. The tax is pegged at 2c per every dollar transacted as part of measures to widen the revenue base. It replaced the previous tax of five cents per transaction.
“All transactions above ZW$100 000 are subject to approval by the FIU,” stated EcoCash.
It added that for amounts up to US$50 000 both sole traders and companies are required to fill in the liquidation form and show proof of bank accounts.
For companies, the agent is also required to show proof of source of funds in addition to a three- month bank statement.
RBZ said in an alert notice: “We wish to advise all EcoCash agents of the liquidation process as approved by the RBZ.”
The financial money agents system had become a source of income for many through facilitating cash-in and cash-out services and it is understood that over 50,000 mobile finance agents risk being affected by the development.
Integration with ZimSwitch
Ecocash has also confirmed it has integrated with the national switch (ZimSwitch) and also announced a reward programme to encourage consumers to transact via the mobile platform.