Zimbabwe: RBZ Rein in Mobile Money Companies

21 August 2020

The Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya has ordered mobile money companies to immediately stop registering multiple individual wallets which are being used as conduits for bypassing regulatory transaction limits by illicit money dealers in its latest mid-term monetary policy statement released today.

The Central Bank noted significant weaknesses in the systems of the mobile payment operators, namely Ecocash, OneMoney, Telecash and Mycash in its forensic audit leading to a raft of remedies.

On the 27th of June, the RBZ suspended and froze agent and bulk-payer wallets to curtail the rapid spiraling of the exchange rate on the black market but since then, illicit money traders have been using multiple wallets to bypass transaction limits.

"Mobile money operators shall, with immediate effect, close all multiple wallets, and allow just one wallet per individual," Mangudya said.

The Bank is accusing mobile money operator employees of conniving with customers to delay or illegally bypass account freeze orders, failing to remit statutory taxes and abusing agent, super-agent and bulk payment wallets for purposes of trading on the foreign exchange parallel market.

Mobile money companies have also been blamed for failing to adhere to Know-Your-Customer principles, characterized by, among other issues, creation of mobile money accounts using fictitious and unverified identification particulars.

The Central bank have also ordered mobile money companies to abolish the Agent's mobile money wallets which it alleges no longer serve legitimate purpose and were now being used primarily for illegal foreign exchange transactions.

Bulk payment wallets will now be approved by regulatory authorities for limited use, primarily for low value transactions and humanitarian funds disbursements to vulnerable members of society.

"Mobile payment operators have been turning a blind eye and have even actively encouraged the abuse of bulk payment wallets for illegal foreign currency transactions, thus earning lucrative transaction fees in the process," the RBZ said.

RBZ noted widespread creation of money on the platforms (overdrafts and fraudulent / fictitious credits) not backed by balances in the Mobile Money Trust accounts.

In May, the RBZ described the country's biggest mobile money operator, Ecocash as a Ponzi scheme, alleging the company agents had an overdraft on their accounts in excess of ZWL$ 39 million which was being used to buy foreign currency on the parallel market.

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