The Sunday Mail
There should be enough bond notes and coins in Zimbabwe for the small transactions where cash is useful but — thanks to cash barons, criminals and tax cheats this is not the case. It has become obvious that further steps are necessary to push Zimbabwe forward in its already impressive acceptance of digital money.
Essentially, the “tap card” has to become as popular and as ubiquitous as mobile money, swipe cards and internet banking, and that requires a common standard, a large number of places where people can recharge cards quickly and easily, and probably some compulsion over acceptance.
There are two main areas where many Zimbabweans need notes and coins: Kombi fares and buying vegetables in the informal markets. In addition, there are some small tuck shops and other businesses that demand notes, largely to avoid investigation by the taxman or to make a profit on selling the notes. Because of the premium that notes can fetch on the black market, there is also a secondary set of business that offer lower prices for pure cash to attract customers, making up the difference by selling the bond notes to other dealers at a premium.
Besides these basically legal businesses there are also businesses outside the law, such as the buying and selling of foreign currency on street pavements, where the cash rate is different from the mobile platform rate, drug dealers and prostitution.
Unfortunately, there are also cash hoarders, people who keep trunks of the stuff, largely because they do not want their peculiar business patterns to come to the attention of the tax and other authorities.
But it is quite possible for Zimbabweans who do not have to use kombis for transport to now live without cash. They can buy everything they need using internet banking, swipe cards or mobile money, especially if they use the dominant mobile money platform.
While pure cash vendors and tuck shops may offer what looks like cost savings, the consumer who has to buy cash will find out that those savings vanish. And there are vendors, a growing number, who do take mobile money since that is all their customers have.
There is a myth that rural people and the elderly are punished in a cash-free economy. The facts are otherwise. There are many rural grandmothers, to take a group who ought to be the biggest sufferers if they do not have notes and coins in their purse, who have taken to mobile money like ducks to water. For a start it allows them to get easy top-ups from working grandchildren and secondly cuts their transport costs since they no longer have to buy expensive bus tickets to get to the nearest large town to access a bank or even a post office for some trivial pension that they are entitled to. And mobile money is now accepted in even the most remote rural areas, although at times a premium is sought.
The one business now ruled by cash that could switch to tap cards is public transport, and in particular the kombis. Mobile money is a serious bother in a kombi, even where it is accepted. Shouting out the phone number of the driver or conductor leads to error. What you see is a phone being passed from the back seats to the front, the conductor punching in the numbers and then returning the phone to the passenger for the PIN.
Tap cards are so simple because there are no PINs or indeed any security threats. They are as convenient, and as risky, as cash. The lack of security features is the main reason why issuers place low limits on how much can be loaded. If the card is lost or stolen it is a nuisance, not a financial meltdown. They are not designed to replace mobile money or swipe cards, they are designed to replace coins and small notes.
But to get kombis to embrace the technology would require regulations banning the use of cash to pay fares. Then all kombi operators, generally the drivers, would have to get the simple tap-card reader and either get their passengers to tap in as they enter the bus, as ZUPCO can already do, or pass it down the rows of passengers if they want to keep the present system of payment on the move.
But such regulations would be easy to make and enforce, and with a few weeks’ notice, plus a standard technology along with easy availability of readers, could be introduced swiftly. Passengers, many of whom now have to scrounge notes and coins or pay extraordinary premiums to the agents of cash barons or dealers, will embrace the technology with less fuss, especially if the basic cards are readily available and chargeable at supermarkets and other shops.
In fact tap cards should become something like airtime or zesa tokens, something that can be bought anywhere without a queue.
With kombi fares out of the picture, premiums for cash would drop or even be eliminated, and that would make it easy to persuade others, such as pavement vendors, to embrace the same technology. There would be no advantage in cash. In a short time we might even find notes and coins becoming the sort of curiosity that cheques and postage stamps have become.
Its worth trying.ac
Beat the cash barons with tap cards
The Sunday Mail
There should be enough bond notes and coins in Zimbabwe for the small transactions where cash is useful but — thanks to cash barons, criminals and tax cheats this is not the case. It has become obvious that further steps are necessary to push Zimbabwe forward in its already impressive acceptance of digital money.
Essentially, the “tap card” has to become as popular and as ubiquitous as mobile money, swipe cards and internet banking, and that requires a common standard, a large number of places where people can recharge cards quickly and easily, and probably some compulsion over acceptance.
There are two main areas where many Zimbabweans need notes and coins: Kombi fares and buying vegetables in the informal markets. In addition, there are some small tuck shops and other businesses that demand notes, largely to avoid investigation by the taxman or to make a profit on selling the notes. Because of the premium that notes can fetch on the black market, there is also a secondary set of business that offer lower prices for pure cash to attract customers, making up the difference by selling the bond notes to other dealers at a premium.
Besides these basically legal businesses there are also businesses outside the law, such as the buying and selling of foreign currency on street pavements, where the cash rate is different from the mobile platform rate, drug dealers and prostitution.
Unfortunately, there are also cash hoarders, people who keep trunks of the stuff, largely because they do not want their peculiar business patterns to come to the attention of the tax and other authorities.
But it is quite possible for Zimbabweans who do not have to use kombis for transport to now live without cash. They can buy everything they need using internet banking, swipe cards or mobile money, especially if they use the dominant mobile money platform.
While pure cash vendors and tuck shops may offer what looks like cost savings, the consumer who has to buy cash will find out that those savings vanish. And there are vendors, a growing number, who do take mobile money since that is all their customers have.
There is a myth that rural people and the elderly are punished in a cash-free economy. The facts are otherwise. There are many rural grandmothers, to take a group who ought to be the biggest sufferers if they do not have notes and coins in their purse, who have taken to mobile money like ducks to water. For a start it allows them to get easy top-ups from working grandchildren and secondly cuts their transport costs since they no longer have to buy expensive bus tickets to get to the nearest large town to access a bank or even a post office for some trivial pension that they are entitled to. And mobile money is now accepted in even the most remote rural areas, although at times a premium is sought.
The one business now ruled by cash that could switch to tap cards is public transport, and in particular the kombis. Mobile money is a serious bother in a kombi, even where it is accepted. Shouting out the phone number of the driver or conductor leads to error. What you see is a phone being passed from the back seats to the front, the conductor punching in the numbers and then returning the phone to the passenger for the PIN.
Tap cards are so simple because there are no PINs or indeed any security threats. They are as convenient, and as risky, as cash. The lack of security features is the main reason why issuers place low limits on how much can be loaded. If the card is lost or stolen it is a nuisance, not a financial meltdown. They are not designed to replace mobile money or swipe cards, they are designed to replace coins and small notes.
But to get kombis to embrace the technology would require regulations banning the use of cash to pay fares. Then all kombi operators, generally the drivers, would have to get the simple tap-card reader and either get their passengers to tap in as they enter the bus, as ZUPCO can already do, or pass it down the rows of passengers if they want to keep the present system of payment on the move.
But such regulations would be easy to make and enforce, and with a few weeks’ notice, plus a standard technology along with easy availability of readers, could be introduced swiftly. Passengers, many of whom now have to scrounge notes and coins or pay extraordinary premiums to the agents of cash barons or dealers, will embrace the technology with less fuss, especially if the basic cards are readily available and chargeable at supermarkets and other shops.
In fact tap cards should become something like airtime or zesa tokens, something that can be bought anywhere without a queue.
With kombi fares out of the picture, premiums for cash would drop or even be eliminated, and that would make it easy to persuade others, such as pavement vendors, to embrace the same technology. There would be no advantage in cash. In a short time we might even find notes and coins becoming the sort of curiosity that cheques and postage stamps have become.
Its worth trying.ac
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