Econet gives in to banks

ZIMSWITCH has broken the impasse with Econet Wireless Zimbabwe over restricted access to its mobile money transfer system, unstructured supplementary service data, with the latter's banking unit now connected to the sector's electronic payment platform.

This indicates that the impasse between banks and Econet will soon be resolved. The mobile phone operator is currently entangled in a bruising feud with banks over its reluctance to entirely open up its network to allow them to roll out mobile money services to clients.

Econet argues that the gateway to mobile phone users was not the network, but its mobile money transfer service, EcoCash, which all financial institutions were free to use.

The Herald Business has it on good authority that the standoff between ZimSwitch and Econet's Steward Bank was largely a result of Econet's hard stance on banks regarding access to its USSD platform for mobile based banking services.

To exert pressure on Econet, banks had used Steward Bank as some sort of hostage as it is in the same financial services industry.

Banks were planning not to transact with its banking unit Steward Bank on the RTGS platform.

Steward Bank's application to join ZimSwitch, which is majority owned by the banks in Zimbabwe that hold varied shareholdings, was last year accepted by the board initially but it was stopped by the bankers who felt parent company Econet was not being fair over its platform.

In a letter seen by The Herald Business, Steward Bank chief executive Kwanele Ngwenya  wrote to the Bankers Association of Zimbabwe president Mr George Guvamatanga advising that the bank has been connected to the instant payment interchange technology, ZimSwitch.

Econet has all along been brushing aside bankers' requests for a revision of its one-sided agreement that is tilted its favour.

Econet were insisting that there will be no wholesale revision of the agreement but the telephony services company said "it is willing to talk to individual banks".

The banks, however, referred the issue to the Reserve Bank of Zimbabwe.  Detailed communication to the most senior office of the RBZ was dispatched to sensitise them on the intransigence of the mobile network operator in question.

However, following a directive issued by the RBZ on national payments systems last week which practically outlawed exclusivity agreements for mobile banking agents, analysts in the banking sector feel the move by the central bank was a sign that more action will be taken against Econet and a further directive may be coming.

Econet's strong stance against giving access to its USSD platform on reasonable terms was seen by banks as militating against efforts to drive financial inclusion in the country.