Finally after lots of announcements on 28 November 2016, the bond notes finally came and a lot of people are getting worried. Most people are scared of a repeat of the 2008 era where the black market was rife and a shortage of cash and retail products made life extremely difficult. Naturally, even looking at it from an economics point of view, the panic is highly likely to cause the resurface of the black markets and all the ill that comes with it.
Though I am not fully in support of the Bond notes introduction, introduced in moderation the potential benefits are really undeniable. Unfortunately there is no guarantee of moderation in their introduction and that is worrying.
The truth of the matter is, it is possible to survive. This time it does not have to be like 2008 and the key is in our embrace of technology as well as the commerce sector in Zimbabwe. If technological payment systems available now that were not there in 2008 are embraced, everything can go a different direction. Here are several ways Zimbabwe can ease the damages of impending monetary apocalypse:
1. Contactless / NFC Payments
Taking advantage of Near Field Communication (NFC), chips can be embedded into devices or cards to shorten the payment process to just the action of tapping a NFC payment recipient device with said card/device. Mobile phone makers jumping on the bandwagon with products like Apple Pay, Huawei Pay and Samsung pay shows how much this is growing as a payment solution worldwide and we should pay attention to it.
Ecocash last year introduced NFC payment through Ecocash Ta! which is convenient because unlike Samsung/Huawei/Apple Pay you don’t need to have a NFC capable handset to use it (those are bloody expensive!). Instead, NFC stickers that could be stuck to anything that customers can carry around are what Ecocash introduced. The Ecocash Ta! has a maximum of $3 on payments and requires your Ecocash PIN when above that. It means that the convenience is available while keeping the amounts safe.
If you think having an Ecocash Branded sticker on your phone is just plain silly there is an alternative is available in the form of the now available Ecocash Debit Cards that come with the NFC functionality. Unless there is huge uptake of this one by retailers it may be the least used service.
Recently I wrote about whether GetCash would be able to beat Ecocash. Their ability or inability to do so will not matter when the bond notes come as Zimbabweans will need alternatives to cash payment solutions. There will be plenty of business for everyone. GetCash has great features that allow for bill payments as well as even bank transfers that people can use. Considering that most banks are now offering mobile and internet banking, that feature may prove to be too much of an effort to attain. GetCash has also introduced GetCash Debit Cards that have the NFC feature (Ecocash watch out!) so that is definitely something that will work for Zimbabweans. GetCash will be a great alternative on the market when the time comes.
3. Bank Cards/ Plastic Money
Many banks offer swipe payment solutions that function with the ATM cards that they issue out. That means that generally any supermarket you get into will have your bank’s swipe machine. If not, you can still swipe with another local bank’s machine for a small charge.
4. Merchant Payments
Most mobile money transfer services allow for retailers and wholesalers to register so users can make direct payments without cashing out first. This means consumers do not have to to worry about charges for cash-outs or send money charges. The merchant feature generally comes a lot cheaper. Providers who are offering merchant payment services are: TeleCash, Ecocash and GetCash.
Three things worry me when it comes to whether this will work against Bond Notes:
- The government itself will have a part to play. How they act and react to consumer and service provider behavior will affect confidence in the bond notes.
- Some service providers push one particular bank swipe machine on consumers all the time, even if it’s not their bank. As a result, a good number get wary of swiping and find it costly due to cross-bank charges.
- Wholesalers are not providing swipe services. I like to do my shopping in bulk and shop for several months at a time with basics. Sadly most of the big Indian run wholesalers are taking nothing but cash. Yes, just cash! They won’t even take mobile money. This means that the people who shop there like me will always explicitly need to look for cash. I hope they end up with all the Bond Notes
The way people behave in anticipation of change has far greater effects than the actual change itself. If Zimbabweans panic and hoard hard cash they’ll definitely create a cash shortage. It’s really a catch 22 situation. With continuous improvement of mindset as well as banking and retail systems everything may go quite smoothly. Consumers will not be exploited because of the differently owned solutions available in the market. This is exploitation in terms of pricing; unless the service providers collude to make the most out of the Bond Note period.
It will be good to watch and see which direction it all takes. #kaizenYOU