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As things stand, plastic money usage in Zimbabwe has mainly been a knee-jerk reaction without proper planning, which is the reason why its usage has been sluggish

Lloyd Gumbo : Mr Speaker Sir

The world over, use of plastic money has increased as a security measure and efficient way of conducting transactions on the back of vibrant information communication technologies that have sped up transactions for businesses and their clients. Zimbabwe is no exception as Government and the financial services sector have been at the forefront advocating use of plastic money due to a biting cash crisis that has hit the country in the last few months as a result of the high demand for the firming US dollar against other currencies in the approved multi-currency basket.

Others believe the cash crisis was triggered by the announcement that the country would introduce bond notes while some argue that it was due to externalisation after repeated threats of blanket compulsory indigenisation of foreign-owned firms.

Yet other quarters aver it was as a result of non-replenishment of nostro accounts due to illicit financial flows.

But Mr Speaker Sir, the thrust of this instalment is not to delve into the causes of the cash crisis but the challenges of the intervention in the advocacy for use of plastic money.

Use of plastic money is indeed a welcome development in Zimbabwe given the fact that we use foreign currency in general though predominantly the firming US dollar, which we have no control over in terms of printing to replenish in the event of cash running out.

This was made worse by the fact that we had a lax control system in terms of maximum withdrawals as foreigners from the region could come to Zimbabwe and withdraw more than $10 000 in a week and take the US dollar back to their countries where they use their local currencies.

So one could say, Zimbabwe became the Washington DC for the majority of countries in Africa in terms of access to the firming US dollar.

So the maximum withdrawals that have been imposed are indeed a good control measure in advocating plastic money usage where another incentive is reduction of transaction charges for using debit/credit cards or bank cards.

Mr Speaker Sir, while in other countries usage of plastic money was mainly by design, for us it was due to circumstances as a result of the sudden cash crisis that hit the country earlier this year.

This means as a country, we were not really ready for vibrant cashless transactions despite the advocacy that was going on over the years.

Fact is that we do not yet have a vibrant plastic money infrastructure that is able to process huge volumes of transactions at the same time.

We also do not have adequate infrastructure to cater for all the needs of plastic money users.

For instance, just at the weekend I had two encounters that revealed that we are not yet there in terms of having vibrant plastic money transactions.

First, I could not use my visa card at Zimra’s Beitbridge border office because they only had two Point of Sale Machines, with Zimswitch and Mastercard switching systems only.

Unfortunately my bank does not have a branch in Beitbridge, meaning I had to come back to Harare to do my payment, then go back to Beitbridge and collect the goods, which by the way were accumulating storage charges that I was supposed to settle for an inconvenience that I did not cause.

And when I tried to make the payment using the same Visa card at Zimra’s Harare office, the POS machines were initially offline and when they came back online, they could not do one transaction but several to settle the amount and the several transactions were to my cost again.

To make it worse, the statement could not be generated on time as the system was said to be down meaning my goods and those of several others were supposed to spend another day in Beitbridge accumulating more storage charges had it not been for the insistence by one of the Zimra supervisors to push the bank whose POS they used to process the statements to avoid further inconveniencing taxpayers.

Mr Speaker, the second encounter was an inter-bank electronic transfer that was done on Friday last week but only reflected in the receiving account on Wednesday when in normal situations it should take not more than two days to process such.

This was after several trips to the banks concerned to establish what the problem was and the answer was the familiar one; that the system was down.

Imagine the inconvenience if someone made an electronic transfer and went out of the country the following day hoping to use the card in their transactions and it takes more than five days for the money to reflect in their account.

These are the serious challenges that the country faces in its advocacy for plastic money usage, which results in people preferring to carry cash outside the country instead of relying on their credit/debit cards.

At the moment, there are a lot of risks in the usage of plastic money such as banks being offline, cards not being on switching systems, cards not reading and transactions failing after debiting or debiting after transactions failed.

It is therefore important that massive investment is made in ICTs infrastructure that will facilitate electronic-based payment systems in a flawless manner if the majority of Zimbabweans are to embrace this noble idea, which will reduce demand for cash that we do not print.

If countries such as Rwanda from the rubbles of a devastating civil war use cards as their new cash that they use in public transport to buying expensive furniture, what stops us from revolutionalising our ICTs to enable monetary transactions only?

As things stand, plastic money usage in Zimbabwe has mainly been a knee-jerk reaction without proper planning, which is the reason why its usage has been sluggish.

Mr Speaker Sir, it is therefore important that while implementation has already begun, proper planning should also be done to make the transactions efficient.

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