Mobile financial services have overtaken traditional methods of transacting with $11 billion worth of transactions being recorded through the innovative digital platforms alone between January and September this year, according to the Reserve Bank of Zimbabwe (RBZ). In the context of the prevailing near cashless situation in the economy, many consumers have used mobile money and electronic platforms to conduct their transactions.
RBZ Deputy Governor Dr Jesimen Chipika told delegates during the International Association of Deposit Insurers (IADI) Africa Regional Committee Conference in Victoria Falls Monday that mobile platforms have become the dominant financial hub for consumers in Zimbabwe.
"For the nine months ending September 30, 2017, 485 million transactions valued at $11 billion were processed on the mobile platforms, representing an increase of 89 percent and 62 percent respectively from 2016. From 2010 when the first mobile platform was licensed, mobile financial services have grown tremendously to the extent that they have overtaken traditional methods of transacting," she said.
In view of the transformative digital financial systems, Dr Chipika said the apex bank has already come up with a regulatory and supervisory framework for mobile money in Zimbabwe. She noted that local financial sector players have taken advantage of technological developments, which has resulted in the growth and modernisation of digital financial services.
"To this end, the adoption of new payment modes has permeated all sectors of the economy including insurance, securities and banking," said Dr Chipika.
She said as the central bank they have allowed partnership arrangements between mobile payment service providers and deposit-taking financial institutions in line with the National Payment Systems (NPS) Act. As a result banks in Zimbabwe are now able to offer mobile payment services to the transacting public.
Zimbabwe adopted a bank-led model in order to facilitate oversight of deposit-taking activities. The RBZ recently issued guidelines for retail payment systems and instruments with the objective of promoting the efficiency, effectiveness and stability of electronic payment systems and the use of e-money. These provide best practices for managing risks in the introduction and operation of electronic payment schemes, said Dr Chipika.
In terms of the retail payments guidelines, banking institutions are accountable for all transactions conducted via digital platforms, including those involving fintechs and mobile money. Dr Chipika said the emergence of disruptive financial technologies has not only broadened access to an array of financial services but has significantly impacted on the financial stability mandate of deposit insurers.
The two-day conference ran under the theme "Deposit Protection and Financial Technology Linked Deposits". Delegates' discussions were centred on how digital technology has transformed the types and distribution mechanisms of banking and financial services across the globe and gaps for policy making.