TeleCash transactions top $15 million

Published: 03 July 2014

Telecel Zimbabwe's mobile money transfer system, Telecash, has handled $15 million since its inception early this year as the company seeks to increase its visibility in the mobile money space.

The local mobile money space has been heating up largely because of its huge revenue potential and the major role it plays in facilitating informal trade. Telecel was the last to enter the industry after Econet's Ecocash and NetOne's Onewallet.

Giving oral evidence to the Parliamentary Portfolio Committee on Communication, Technology, Postal and Courier Services, Telecel general manager Angeline Vere said the service had grown considerably and company was hoping to double the service's subscriber base by end of the year.

"More than $15 million has been moved through Telecash since its launch. Currently we have 600 000 Telecash subscribers and we hope to reach 1,2 million by end of the year," she said.

She said the agent base had also grown to 3600 and they were also working on expanding it.

The issue of agents has also been a contentious issue in the industry and this resulted in Econet baring its agents from associating with Telecash. The issue was resolved when the Reserve bank of Zimbabwe resolved issued a directive which basically said that mobile money agents can conduct services for multiple mobile financial service providers.

Despite the mobile money success in the country, the service remains expensive for most users. Vere said the service became expensive due to the levies and taxes imposed by government.

"We respected the Government initiative to introduce the 5 cents levy all mobile money transactions but that charge is passed on to the consumer because more than 60 percent of what the mobile network operator makes through mobile money services goes to the agent. The margins are very thin so the 5 cents invariably affects the end user.

"If you add the 5 cents and the Value Added Tax, the service becomes expensive for the consumer and they decide not to use it," she said.

She added that the reason most people are unbanked is that they cannot afford the high bank charges so the charges being passed to mobile money consumers will invariably make it unaffordable.

"We would like to urge government to remove VAT on the service and remain with the 5 cents levy to make things cheaper and easier for all the parties involved," she said.
- BH24