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Zimbabwe: Why Country Should Embrace E-Commerce
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 Published by the government of Zimbabwe |
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The Herald (Harare)
27 March 2008
Posted to the web 27 March 2008
Harare
THE electronic-commerce revolution provides various options for Zimbabwe's payment system already frustrated by cash challenges, particularly in the latter part of last year.
Zimbabwe must take crucial lessons from the cash crisis of 2003 and lately that of November 2007 to January and start to advocate the use of alternative payment method, even more vigorously.
The advent of e-commerce, and its plethora of payment options, presents vast opportunities for escaping the cash crunch, and enhancing efficiency.
Generally, e-commerce refers to business conducted over the Internet.
Over the past decade, the financial services sector has experienced major changes. Among others, the technological development has reshaped the consumption of financial services.
Banking especially has undergone changes unprecedented in its history.
Understanding consumers, customer needs and values has become more important for financial institutions, not only due to the changing environment but also because of changed customer behaviour.
One of the main requirements in e-commerce is the ability to accept a form of electronic payment. This form of electronic payment is referred to as financial electronic data interchange (FEDI).
FEDI has become increasingly popular over the last number of years due to the widespread use of the Internet based shopping and banking.
In the modern world, there are a significant number of bills that consumers pay on a regular basis, which include: power bills, water, Internet, phone service, mortgages, car payments etc.
E-commerce should allow consumers the flexibility of not visiting the bank for cash withdrawals, or even Zinwa for water payments.
The most immediate options that several local financial institutions are adopting is cellphone and internet banking.
Mobile service allows consumers to transfer funds, check balances, make bill payments, and look up branch locations from their mobile devices.
As use of the Internet continues to expand, more banks and thrifts are using the Web to offer products and services or otherwise enhance communications with consumers.
The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business, any day, and any time.
In an environment where inflation has hit roof levels, and the local currency continues to depreciate on a daily basis, the use of e-based payment systems becomes paramount.
Other forms such as credit and debit cards would also have to be encouraged as immediate replacement for cash.
The world over, most economies are turning to plastic money. Cash only becomes a necessity in a few instances were cards cannot be used.
In Zimbabwe, the dependency on cash has been blamed for fanning foreign currency trade on the parallel market.
The illicit practice may be curtailed if real time payment methods were religiously pursued, as these provide foolproof evidence on the origin and purpose of funds.
The Reserve Bank of Zimbabwe introduced the Real Time Gross Settlement, as an alternative payment system.
At the end of 2007, the RTGS was the most widely used form of payment constituting about 85 percent of all payments done through the country's financial system.
While consumers have complained of delays in the use of RTGS, the system has managed to send through volumes of transactions, which have eliminated the need to carry bag-loads of cash in this hyper-inflationary environment.
In the end, banks would have to realise that clients from all walks of life are now becoming more comfortable with using technology to perform their banking, payment and investment functions.
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Increased mobility and the proliferation of mobile and IP based devices have given financial institutions a fast, secure and reliable communications channel to provide financial information to their customer's devices.
It is important that local businesses and individuals take their stance in the Information Communication world now.
Zimbabwe is already at an advantage. It has an estimated 1.2 million Internet users, which places it amongst the top three Internet using countries in Africa including South Africa and Tunisia.
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