Published: 11 October 2013

CHEQUES are dying as a payment system in Zimbabwe as they have continued on a downward slip since the advent of the multiple currency regime in 2009 with transactions decreasing from $12,3 million in July 2013 to $10, 5 million in August 2013.

The shift, as shown in the August 2013 Reserve Bank of Zimbabwe (RBZ) monthly economic review, comes as more and more Zimbabweans adopt internet, mobile banking and card payment systems.

The report shows the value of mobile and internet based transactions increased by 4,93%, from $303,20 million in July to $318,16 million in August 2013 while that of card based transactions rose by 2,23%, from $334 million in July to $341,5 million in August 2013.

However, transactions on the Zimbabwe Electronic Transfer Settlement System through the real time gross settlement system in August decreased by 15% to $3,35 billion from $3,96 billion in July 2013.

The volume of transactions also registered a decrease of 9%, from 205 854 to 187 747 over the same period.

Bankers who spoke to businessdigest said banks have been trying to do away with cheques as a bill of exchange for a while as they are costly to process and are now predominantly low value, but they are bound by the legal environment to provide the service.

"Cheques are a recognised legal means of payment and banks have already invested in costly cheque clearing systems which they must use but they will die a natural death," said a banker who requested anonymity.

Financial institutions and mobile companies are pushing new payment methods onto the market.

Econet Wireless Zimbabwe Ltd is the market leader in terms of mobile money transfer services with more than two million subscribers registered on its EcoCash facility.

Econet deputy finance director Roy Chimanikire told an annual general meeting last month EcoCash was expected to drive growth and share value going forward after handling in excess of $1,2 billion in the previous 12 months.

EcoCash allows people to send money to each other from their cellphones and to collect the cash from a network of about 3 000 agents.

The mobile operator integrated the system through various major banks — CBZ Bank, Steward Bank and Stanbic Bank — allowing those who have existing bank accounts to move money in and out of banks without entering a banking hall, or without speaking to a teller directly.

EcoCash has also facilitated provision of banking services to millions of people who, until now, were outside the banking system completely.

Many banks moved towards internet and mobile banking after government said banks should, effective January this year, not levy fees on deposits of less than $800 and give 4% interest on deposits of at least $1 000 held over 30 days.

This resulted in an outcry by banks who had been earning most of their income from fees and commissions.

The country's largest banking group CBZ Holdings Limited launched in-store ATMs in the first half of 2013 as part of an initiative that will see the bank deploy over 300 ATMs in the next 24 months around the country in partnership with a number of retail outlets.

At the end of May this year, cheque transactions decreased by 7,2% from the previous month to $15,4 million. Mobile and internet based transactions have for the first time surpassed card payments after registering a 28,3 % growth in the month of May, as more account holders turn to the convenience of mobile banking.

According to the RBZ's May 2013 monthly economic review the value of mobile and internet based transactions rose from $283,6 million in April to $364 million in May 2013 while the total value of card based transactions rose by 1,3% from $328,2 million in April to $332,6 million in May 2013.

Going forward, the RBZ said its goal is to ensure payment systems are available without interruption, meet all users' needs, and operate at minimum risk and reasonable cost.

"As such, the central bank will continue to deepen its role through increased monitoring and collaboration with various stakeholders in order to maintain safety, soundness and stability in of the payment systems," said the central bank in May.


- theindependent