10 December 2018

Mozambique: Bank of Mozambique Signs Agreement With Euronet

Maputo — The Bank of Mozambique on Monday signed an agreement with the US-based provider of electronic payment services, Euronet, for the licensing, implementation and maintenance of the computer system for interbank payments.

The agreement was signed by the director of the central bank's legal office, Luisa Navele, and Euronet Managing Director, Cindy Ashcraft, and witnessed by the governor of the Bank of Mozambique, Rogerio Zandamela.

Navele said the Euronet system will be used by the Mozambique Interbank Company (SIMO), which connects most of the commercial banks in the country. "This is a licence for an indefinite period", she said. "It is certified and it meets the requirements of the international payments system". But she did not reveal how much the licence cost.

Euronet will thus replace the Portuguese company Bizfirst, which developed the electronic platform Ponto24, to which most Mozambican banks were connected.

Relations between SIMO (which is 51 per cent owned by the Bank of Mozambique) and Bizfirst were extremely poor. Bizfirst claimed that SIMO had not paid the licence fee for over two years, while SIMO denied there was any debt, and accused SIMO of blackmail.

In November, Bizfirst cut off SIMO's access to the electronic system. No bank linked to SIMO could handle electronic payments - which mean that the debit cards, ATMs, and POS (Point of Sale) card readers of these banks stopped working. Fortunately, the country's largest bank, the Millennium-BIM (International Bank of Mozambique) had never joined SIMO, so its payments systems were unaffected.

The Bizfirst blackout lasted for five days - until the commercial banks, with the authorisation of the central bank and the government, negotiated with Bizfirst and agreed to pay the Portuguese company 3.5 million euros (about four million euros).

The Bank of Mozambique had already been looking for alternatives to Bizfirst, and must have been in contact with Euronet well before the November blackout.

No date has yet been announced for the installation of the Euronet system in SIMO.

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