Zimbabwean banks have been left shuttered following the decision by electronic payments system services provider, Paynet to suspend its services pending payment of a cumulative sector debt of US$ 470 000 for services rendered since beginning of the year.
The development has plunged the banking sector into one of the worst financial crises of recent times as all RTGS transactions, including ZIPIT, have been halted, compounding pressure on an already volatile economic situation prevailing in the country.
Since beginning of this week, there haven't been funds processed through the RTGS and ZIPIT platforms due to the suspension of service by Paynet who claim losses in unpaid invoices of up to US$ 170 000 to local banks for the months of March and April alone.
Local banks are failing to pay the service provider in foreign currency as per contract.
The company alleges that local banks have not communicated their position with regards to settling payments to the service provider as they await communication from the Interbank Operations Committee (IOC) which it accuses of assuming unregulated control of the purchase of Paynet services, quoting the FBC's treasurer, "The interbank operations coordinated and led the discussions."
"Paynet's service to all its bank customers in Zimbabwe was suspended after close of business on 10 June due to a collective refusal to pay historical and contracted pricing to Payserv Africa in US dollars," read a statement by Payserv Africa, the holding company of Paynet.
"Rather than engage directly with Payserv, the banks chose to speak through the IOC which committed its members, and perplexingly their superiors, to respond to Payserv with "one voice"- silence. Despite the fact that this is a commercial issue not an operations issue, rather than engage with us directly, banks abdicated their commercial interest to the IOC. The IOC was effectively turned into an unregulated monopsony controlling the purchase of Paynet services. To quote FBC's treasurer, "The interbank operations coordinated and led the discussions," the company said.
However, some local banks have already renounced written commitments made prior to the 31st of May to honour Paynet's invoices citing they can only wait for an industry position from the IOC.
"Stanbic Zimbabwe (a subsidiary of Standard Bank South Africa) and the Industrial Development Bank of Zimbabwe (IDBZ) recanted written commitments made prior to 31 May to honour Payserv Africa's invoices Representatives of these banks claimed they will await an "industry position" from the Interbank Operations Committee ("IOC")," further read the statement.
Local banks are pushing for the government to compel Paynet into accepting payments in local RTGS dollars using the interbank market rate against fees agreed upon in USD which the service provider is not interested in.
But analysts have warned of a slowdown in the economy as delays in payments as already witnessed are likely to dampen business activity.
"It will basically slow down activity in terms of the payments, so it will definitely affect business because as you know we are living in a cashless society so it will take a toll in that respect. But what is most likely to happen is there is going to be a shift to other alternatives in payment platforms that we can rely on, so basically it will be an advantage to platforms such as Ecocash and other mobile money services," financial analyst Batanai Matsika told 263Chat Business.
While banks fail to settle Paynet debts in foreign currency at the same time they are able to meet other external payments in foreign currency such as foreign owned technologies which include core banking softwares, database software, Microsoft and server software, it can only be a question of sincerity in bringing a fix to the stalemate.
"I think there has to be a solution immediately because you can't continue to operate like this. From a business perspective, it's an urgent need, to resolve the issue. I think it's something that has to be done immediately," added Matsika.