The Sunday Mail
Africa Moyo
THE Bankers Association of Zimbabwe says it wants more point of sale (POS) terminals to encourage greater use of plastic money.
Currently, there are more than 500 ZimSwitch enabled automated teller machines and over 7 000 POS terminals.
Analysts say the use of the US dollar as a reserve currency and its inherent value have led to its use as a store of value rather than a medium of exchange.
This has seen some individuals and businesses hoarding cash.
BAZ president Dr Charity Jinya told The Sunday Mail Business that people should opt to use their ATM cards instead of withdrawing cash.
“We have been educating the market about the convenience and cost-effective benefits of using digital and plastic money. The use of the electronic delivery channels that banks have in place, will minimise the need for physical cash…
“Opportunities continue to be explored to put more terminals particularly in areas where the majority of people make payments such as, utility payment areas, wholesale merchants and Government areas where the need for cash exists and even at toll gates,” said Dr Jinya.
The Reserve Bank of Zimbabwe is also pushing the market to embrace plastic money.
The Zimbabwe Revenue Authority is insisting on use of plastic money for payment of customs duty, especially for vehicle imports at the country’s ports of entry.
But the market largely views the charges levied on plastic money as extortionate and discouraging.
A survey conducted by The Sunday Mail Business recently indicated that it costs between USc10 and US$1 per transaction to pay for products using POS terminals owned by banks with which depositors are account holders.
On ZimSwitch-enabled devices, charges are between US$1 and US$3 per transaction.
Economists say banks should shift to a volume-based business model rather than the present margin-based model.
BAZ was however evasive on the issue of costs.
“It should be understood that transactions carried out via POS machines and ATMs are cheaper than those conducted over the counter inside the banking halls. It is for this reason as well that we encourage the use of plastic cards,” said Dr Jinya.
CABS will be phasing out physical withdrawals and deposits from June 1, 2016.
Although most depositors are amenable to the idea of obtaining ATM cards, the costs of getting them from banks, which range between US$10 and US$25, are considered expensive.
The RBZ has urged banks to slash service fees and attract more deposits.
All banks were profitable in 2015, with earnings mostly coming from fee income as compared to the traditional revenue source – interest income.
Dr Jinya said at a Zimbabwe National Chamber of Commerce breakfast meeting last week that banks would continue to limit withdrawals where necessary.
Financial institutions will also work with business in exercising discretion over the type of goods to be imported.
Added Dr Jinya: “Every bank will look at its position, if they believe they need to ration what is there; they will do on the basis of know your customer…
“We have agreed with the Reserve Bank on priorities and, as indicated, those are exporters, people who are generating the exports. That does not mean that exporters can export water, for instance.
“So, as banks, we will be looking at these elements to make sure because if we simply process transactions and export our currency and we remain with nothing, even with nothing, even the banks themselves will be injecting a risk in the market, nobody would appreciate.”
A weakening South African rand against the US dollar has made imports from South Africa attractive relative to locally produced goods.
Last year, the country’s trade deficit was US$3,3 billion, causing pressure on cash in the country.
