Mapping the Retail Payment Services Landscape in Zimbabwe

There remains a large percentage of Zimbabweans who are “previously banked” (estimated to be at least 12% of the population)

 

A recent study Mapping the Retail Payment Services Landscape in Zimbabwe managed by Cenfri commissioned by FinMark Trust and conducted by Bankable Frontier Associates finds: 

  • The Reserve Bank of Zimbabwe (RBZ) has taken a “test and learn” approach to new innovations and currently assess applications for new product innovations on a case-by-case basis
  • There is no regulatory framework for electronic money or stored value or specific rules on the development and management of agent networks for mobile banking
  • Electronic infrastructure is still relatively limited with inconsistent power and mobile coverage in many rural areas
  • The National Payment System (NPS) Act does not sufficiently address the growing trend towards complex retail payment mechanisms over electronic channels is currently considering developing an e-payment act to cover issues such as e-signatures and other
  • Customers highlight sensitivity to cost rather than knowledge as a barrier
  • Both people who use banks and those who have never had an account reported that bank charges have increased and are prohibitively high

Click here to download the full report (PDF, 1.48MB)

The study analysed the country context, demand, supply and regulatory framework for payment services in order to conclude on the scope for retail payment services to play a transformative financial inclusion role and the market and regulatory challenges to be overcome for that potential to be realised.

 

The report is part of a series of studies that also covers Malawi, Mozambique and Zambia. In addition to the individual country report, the findings feed into a regional synthesis report that identifies cross-cutting trends, provides a brief global comparison, and concludes on implications for regional financial integration.

 

Recommendations and conclusions:

 

Zimbabwe is unique in that there is a significant population of citizens who are former customers of formal financial institutions and have left the system, often due to mistrust in market stability. Efforts to improve the policy framework for payment system development should be prioritized to (i) take advantage of existing market activity and (ii) provide essential regulatory clarity for future development of innovative market solutions by:

  • Consolidating the guidance under the “test and learn” approach into a more formal legal guidance that can effectively provide the needed certainty without stifling innovation.
  • Formalizing and publishing guidance issued by the National Payment System Department (housed in the RBZ) to firms interested in using networkers to distribution service
  • Introducing legal framework to address electronic retail payment mechanisms
  • Pushing service distribution outside of the urban centers
  • Supporting financial empowerment and consumer protection to accompany new products 

Additional Info

  • Country: Zimbabwe
  • Institution: FinMark Trust, BFA
  • Date Published: 2012
  • Document Type: Research Papers
 

Mapping the Retail Payment Services Landscape in Zimbabwe

There remains a large percentage of Zimbabweans who are “previously banked” (estimated to be at least 12% of the population)

 

A recent study Mapping the Retail Payment Services Landscape in Zimbabwe managed by Cenfri commissioned by FinMark Trust and conducted by Bankable Frontier Associates finds: 

  • The Reserve Bank of Zimbabwe (RBZ) has taken a “test and learn” approach to new innovations and currently assess applications for new product innovations on a case-by-case basis
  • There is no regulatory framework for electronic money or stored value or specific rules on the development and management of agent networks for mobile banking
  • Electronic infrastructure is still relatively limited with inconsistent power and mobile coverage in many rural areas
  • The National Payment System (NPS) Act does not sufficiently address the growing trend towards complex retail payment mechanisms over electronic channels is currently considering developing an e-payment act to cover issues such as e-signatures and other
  • Customers highlight sensitivity to cost rather than knowledge as a barrier
  • Both people who use banks and those who have never had an account reported that bank charges have increased and are prohibitively high

Click here to download the full report (PDF, 1.48MB)

The study analysed the country context, demand, supply and regulatory framework for payment services in order to conclude on the scope for retail payment services to play a transformative financial inclusion role and the market and regulatory challenges to be overcome for that potential to be realised.

 

The report is part of a series of studies that also covers Malawi, Mozambique and Zambia. In addition to the individual country report, the findings feed into a regional synthesis report that identifies cross-cutting trends, provides a brief global comparison, and concludes on implications for regional financial integration.

 

Recommendations and conclusions:

 

Zimbabwe is unique in that there is a significant population of citizens who are former customers of formal financial institutions and have left the system, often due to mistrust in market stability. Efforts to improve the policy framework for payment system development should be prioritized to (i) take advantage of existing market activity and (ii) provide essential regulatory clarity for future development of innovative market solutions by:

  • Consolidating the guidance under the “test and learn” approach into a more formal legal guidance that can effectively provide the needed certainty without stifling innovation.
  • Formalizing and publishing guidance issued by the National Payment System Department (housed in the RBZ) to firms interested in using networkers to distribution service
  • Introducing legal framework to address electronic retail payment mechanisms
  • Pushing service distribution outside of the urban centers
  • Supporting financial empowerment and consumer protection to accompany new products 

Additional Info

  • Country: Zimbabwe
  • Institution: FinMark Trust, BFA
  • Date Published: 2012
  • Document Type: Research Papers