The Reserve Bank of Zimbabwe has rescinded its decision to ban cash-in and cash-out mobile money functionalities.
The Zimbabwean central bank, which initially argued that the functionalities were being abused by some mobile money agents to fuel illegal currency dealings (which saw cash being sold for high premiums of up to 50%), had been dragged to court by EcoCash.
The High Court in Harare had set down 4 October 2019 to hear EcoCash’s application, but on Wednesday 3 October Central Bank of Zimbabwe governor John Mangudya rescinded the ban.
“Payment System Providers and agents are hereby advised that the cash-out facility is now capped at (ZWL)$100 per transaction with immediate effect. Related to that, existing operational cash in and cash-back limits shall remain,” said Mangudya.
The ZWL100 limit has been criticised on social media, with many users saying it is too low – given the escalating prices of goods.
Mangudya argued that “cash-in, cash-out and cash-back facilities (were initially banned) to protect the transacting public from some mobile banking agents leveraging and abusing” the platforms.
In its court application against the directive, EcoCash said it had “already started to implement the directive with the result that there will be a total shutdown of the entire EcoCash system” in the process.
EcoCash services were sluggish on Wednesday, with many users complaining of curtailed functionality across service options such as data purchases, wallet to bank transfers and other payments.
Mangudya added: “Payment systems by their nature play an important role of providing a mechanism or highway to facilitate economic activities in the country. As such, the Reserve Bank continues to promote digital financial services which contribute to financial inclusion and stability.”
“The Reserve Bank will be injecting cash into the economy without changing money supply. In this regard, banks will exchange existing RTGS (electronic) balances for cash thus maintaining the monetary base unchanged,” he added.