The Reserve Bank of Zimbabwe (RBZ) has amended the National Payment Systems Act to prevent close to five million mobile money subscribers from losing their money should network operators (MNOs) collapse, an official has said.
This comes as the central bank has also expressed concern that the rapid growth of mobile money banking in the country has become a threat to the traditional banking system.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), the total number of active mobile money subscriptions increased by 42,5 % to reach 4,7 million in 2017 from 3,3 million in 2016. According to the report, mobile money has provided an effective alternative for making payments in the midst of the liquidity crisis.
The country has three MNOs, namely Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne.
Concerns had been raised over what would happen if any of the MNOs go under given that they were reluctant to reveal trustees of their trust accounts to the Deposit Protection Corporation (DPC). The DPC says failure to disclose names of trustees in any trust account poses a challenge when it comes to compensating account holders.
However, in an interview this week, RBZ governor John Mangudya said the central bank amended the 1995 National Payment Systems Act to ensure that subscribers are not prejudiced in the event that any of the MNOs collapse.
“The National Payment Systems Act was amended to deal with what you are talking about. It is an old Act but we amend it from time to time so that we keep up with the trends. It challenges the RBZ to offer efficient, reliable and safe payment services to customers. We also do what we call risk profiling of these companies and definitely it is our responsibility to ensure that, for instance, if Econet goes under, all the subscribers will get their money,” said Mangudya.
“I get that DPC need the names of the trustees in order to compensate and I can tell you that RBZ has the power to demand those names from MNOs and then forward them to DPC when the time comes.”
Mangudya also said mobile money has become a threat to the normal banking channels as citizens find the service more convenient than visiting a banking hall. Most banks are trying to compete with mobile money through the use of internet banking platforms.
Sources in the finance sector told this paper that ensuring that mobile money account holders are safe and insured is an issue government has been trying to deal with for some time now.
“Meetings have been held to try and see how the financial sector can help the MNOs in terms of making sure that mobile money is secure. For instance, one of the solutions which the central bank came up with is that Econet does not only rely on Steward Bank for their trust account to avoid concentration risk, therefore they were told to open other trust accounts with different other banks,” the source said.
Source: Zimbabwe Independent