Zimbabwe’s largest mobile network provider, Econet wireless plunged the nation into darkness or rather into pandemonium when their mobile money system known as Ecocash crashed for two days.
Ecocash, the most used mobile money system was down for two days which forced the nation’s business transactions to stall, as a result of people’s dependency. Competing with One Wallet and Telecash, the mobile money processes about 90% of transactions in the entire mobile money field in Zimbabwe
In retail shops, trolleys could be seen abandoned near or at the till area as peoples only means of paying had gone down in some of the towns and cities. It wasn’t easy for the notorious black market money changers of whom many of had to go home as their business means was down.
Although retailers have not opened up on the actual loss, the cost of the blackout on their business could run into several thousands of dollars in lost revenue as customers walked away frustratedly after failed transactions.
The damage was replicated on both small entrepreneurs and consumers.
Only multicurrency money changers profited from the now not-so-clandestine black market.
But the real questions remain…
Is the nation ready for a cashless society?
Will the government ever solve the cash crisis?
Does Econet have the nation’s economy in its hands?
Will other mobile money service providers ever outdo Econet?
When Ecocash eventually crush for good, what next for the nation?
The nation’s overreliance on mobile money transactions tells the whole story sadly of a liquidity crisis hit nation with no end in sight. It brings forth the idea that when Econet sneezes the nation faints. Minister of ICT, Supa Mandiwanzira’s prediction that if the Ecocash systems were to fail at any given time the disruption would affect the entirety of the nation seems to have been proven correct here.
Various economic analysts described Postal and Telecommunications Regulatory Authority of Zimbabwe’s (POTRAZ) move to engage Econet to seek clarification over the breakdown of their mobile transaction platform; signalling the government’s failure to deal with the imminent issues bedevilling the nation.
However the disruption of such a dominant financial platform has raised serious questions in Zimbabwe about the characteristic vulnerabilities of going cashless and reliance on mobile money.
Much of the Zimbabwe debate has been about a real risk of loss of money in the event of a big platform crashing. Zimbabwe’s long troubled history with currency and hyperinflation has made citizens more sensitive to any possible threat to the country’s financial system which can derail their savings. Some people have even suggested bitcoin as a solution to the risks though Zimbabwe has all but crippled crypto transactions by banning banks from processing virtual currency payments.
Besides Zimbabwe’s own challenges, there has been a big push by African governments, and other stakeholders to encourage the take up of mobile money services as a way to help expand financial inclusion in developing countries where there is still piggy banks. The hope is that as mobile phone penetration continues to rise in most African countries more people will use mobile money for convenience and lower transaction costs.
Zimbabwe’s economy remains stagnant, with banks no longer allowed to give US dollars to individuals who receive forex in their accounts. There has also been speculation which the central bank has dismissed, that government plans to bring back the Zimbabwe dollar before elections on July 30. But the EcoCash glitches have been real and the impact large.
A forbidding implication of a powerful monopoly and on-going economic collapse.