Zimbabwe's cashless push stumbles

Zimbabwe's digital payments ecosystem experienced a notable contraction in the first quarter of 2025, with the total value of electronic transactions processed through national payment systems falling by 8.66% to ZIG532.61 billion. This represents a significant decline from the ZIG583.14 billion recorded in the previous quarter, according to the latest payments system analysis released by the Reserve Bank of Zimbabwe (RBZ). Transaction volumes also decreased by 7.54%, dropping to 174.41 million during the same period.

The slowdown in digital payment activity coincides with tighter monetary policy measures and declining consumer purchasing power. Although the introduction of the Zimbabwe Gold currency (ZIG) in April 2024 initially boosted confidence in digital transactions, recent liquidity constraints have dampened payment activity across various digital platforms. Analysts have linked the decline to broader macroeconomic challenges such as reduced disposable incomes and cautious business spending.

The RBZ report also highlighted the influence of seasonal factors on the quarter-on-quarter drop, noting that the previous quarter included the festive season-a period typically characterised by bonus payments and increased spending. "The decrease in the first quarter of the year when compared to the last quarter of last year is largely attributed to the festive season, which is typically marked by bonus payments, while activity levels in the first quarter reflect the normal trend," the report stated.

Dollar-denominated transactions processed through the Real Time Gross Settlement (RTGS) system also recorded a 9.4% decline in value, falling from US$8.55 billion in the last quarter of 2024 to US$7.74 billion in the first quarter of 2025. Transaction volumes for these dollar RTGS payments dropped by 2.31% to 1.46 million.

Similarly, local currency RTGS transactions saw a 9.12% decline in value, decreasing from ZIG340.50 billion in the fourth quarter of 2024 to ZIG310.19 billion in the first quarter of 2025. The number of local currency RTGS transactions also fell by 8.78%, settling at 2.57 million. Retail transactions followed this downward trajectory, with their aggregate value decreasing by 8.33% from ZIG242.64 billion to ZIG222.42 billion, while the volume of retail transactions declined by 7.53% to 171.84 million.

Despite the overall downturn, the value of collateral held for payment systems such as Zimswitch, the Central Securities Depository, and the Zimbabwe Stock Exchange settlement systems increased slightly to ZIG571.83 million, up from ZIG562.03 million in the previous quarter. The report attributed this rise primarily to increased transaction value processed through the Zimswitch platform, which caused collateral balances to grow by 2%.

The Victoria Falls Stock Exchange Limited reported a foreign currency collateral level of US$47,766.28 for the first quarter of 2025, deemed adequate to cover risk exposures.

Meanwhile, the point-of-sale (POS) terminal population decreased from 135,520 at the end of the fourth quarter of 2024 to 129,081 by March 31, 2025. Conversely, active mobile financial services subscribers recorded a slight increase, rising to 10.1 million from 10 million during the previous quarter.

As of March 31, 2025, the official exchange rate stood at US$1 to ZIG26.8, reflecting the ongoing dynamics in Zimbabwe's evolving digital payments landscape.