The Zimbabwe situation is as our situations always are; almost purely isolated to Zimbabwe. How many other case studies can we find on how to live in a country with no cash? This is really something that any other economy would have a hard time duplicating. It’s common knowledge that whenever there is a crisis the one who benefits the most is the one who provides a solution. Half a decade ago Econet did that with Ecocash. A product so good everyone was forced to integrate and participate. It’s no wonder the banks are finally fighting back against Ecocash.
We had the time when banks were paramount. I remember a ten year – old me having a junior account with a local bank. Back then it even made sense to teach your children about saving and having a bank account. Back then the saving accounts earned interests on deposits and it made sense to be a banking individual. I felt like I was mature at my young ten years old. The banks were making money from investing our deposits, from the bank charges while we ever so happily transacted and signed cheques enjoying our bank accounts. Everyone was happy.
Then everything went horribly wrong, the crash of our economy, hyperinflation and the cash black market. Soon enough a solution was found in the foreign currency that Zimbabweans were already using. Zimbabwe became the multi – currency economy it is now (though admittably it is difficult to find any currency at the moment). Soon the authorities had no option but to formalize our naughty relationship with other country’s currencies. Now formalized, we all woke up one day and were told that our funds had been zeroed. Our quintillions and other such newly created values of dollars were gone overnight. The banks had no explanations to offer us and many months later they converted the funds to US dollars. The amount now converted was so paltry and was such an insult it almost felt like they should have kept it.
Soon Econet, our oh-so-trusted MNO came with Ecocash. The uptake was initially slow but it eventually grew exponentially. In just a few years it became Econet’s golden boy and the best way to send and receive money in Zimbabwe. In the POTRAZ recent report, Ecocash has a whopping 99% of the mobile money market share. That means Telecash, OneWallet and GetCash don’t exist; but we already knew that. Having introduced the link – to – bank function on Ecocash, they enabled us to move funds to and from our banks. This feature would prove to be useful when the cash crisis started. That is where it really went south for Banks. Yes, Ecocash had been functional for years and had taking their ground as it required less to create and account and functioned in more places but this new development was epic. Now even the individuals with bank accounts could move all their money or most of it to Ecocash in one transaction that wouldn’t cost them much and wouldn’t make the banks much. So the already dwindling revenues dropped some more. This is why banks fought back.
The banks have started fighting back in two ways:
- Mobile Applications and Mobile Banking. In this period where we are slaves to our phones and we love doing everything on them, Ecocash seemed perfect because it was available on mobile. It having applications to make the whole process easier was even better. In the past two months I have noticed several banks start advertising their mobile applications for banking as well as their mobile banking platforms. I wonder why they never thought to challenge Ecocash in this way all along. This for me is great, as consumers we really need ease of access to our money. This is especially true for the virtual form as the effort of getting hard cash for me is not worth it anymore. This is inspiring, Banks have refused to keep losing their clientele but have instead sought to finally solve the problem. This may just bring us back to the world of banking. After, of course, they let us know why interest on deposits is now such a difficult thing to get.
- Subtle Sabotage. Out of fear of losing their few customers to other banks, most have been making sure they add the Ecocash- Bank Link functionality to their accounts. That’s good right? Yes, it would be even better if they were actually doing it. Most banks have started bottle – necking the activation process of the Ecocash – Bank link as it does not make any money for them. A good friend of mine recently went to his bank to find out why a 14 day link was now in its fourth month and not done. After kicking and screaming for a while the bank teller pulled him to the side and let him know about the bottle necking that they do with applications. He told him that they allow activation on just enough accounts for the illusion of progress but will keep doing it that way since they are in the business of making money too.
The finance sector is becoming one of ferocious competition. I feel it is only a matter of time before consumers start benefiting from it. If your bank is promoting their mobile banking facilities it may be worth taking a look at it and seeing if its worth it. Key will be how much time it takes for transactions to take place. Ecocash remains highly competitive in terms of convenience as well as quick transaction times and as such they will be very difficult to topple. To make matters worse Ecocash is improving too. It’s continuous improvement all around. #kaizenYOU