Zimbabwe moves to cashless society as US$3 million deal yields fruit
Saturday, 12 November 2011 17:37
Augustine Moyo
Business Editor
Smartpayment Solutions (Smartpay), in conjunction with South Africa’s NET1, will on the 22nd of this month kick off a pilot project of Net1’s Universal Electronic Payment System (UEPS) in Chitungwiza following the successful conclusion of a venture capital transaction in excess of US$3 million.
The deal, which got the green light from the Reserve Bank of Zimbabwe (RBZ) a few years ago and had initially failed to take off due to capital constraints, is now on course.
Smartpay acting managing director Ms Miriam Mutizwa said her organisation is excited to offer Net1’s UEPS’s switch in Zimbabwe as it embodies a branchless banking model (bank without banking halls).
“The RBZ gave the nod for us to implement NET1’s UEPS in Zimbabwe a few years ago, but the acquisition of the switch was stalled by the challenges of raising the required amount in foreign currency to implement the project.
“We will be rolling out 200 Point of Sale (POS) in the Chitungwiza municipal area. That is more than 200 branches any bank can have.
“South Africa’s NET1, who are the suppliers of the technology, offered us a venture capital arrangement in excess of US$3 million. NET1 will pull out after an agreed number of years, leaving us to run the project. The project is in line with the country’s indigenisation laws. So presently NET1 is both supplier of the switch as well as investor,” she said.
Smartpay’s electronic banking concept is targeted at the un-banked, under-banked and facilitation of cashless transactions market with a prepaid smart card or debit card issued via retail and community agents thus creating “a branchless banking model”.
Smartpay will also offer an affordable suite of banking products and services offered via the smart card, which becomes the physical bank account under-written by various financial institutions that will join Smartpay’s electronic banking concept.
Services offered via the smart card will range from wage payments, pension payments, social grant payments, cash deposits, cash withdrawals, wage payments, balance inquiries (directly from the card), transaction lists (directly from the card), deposit without card, wallet to wallet transfers (from primary to savings and vice versa), money transfers between smart cards, bank accounts and un-banked people, third party bill payments to registered, linked and once-off merchants, amongst others.
Smart card technology is fast becoming an everyday thing in our culture and daily lives.
Ms Mutizwa said Smartpay’s smart card has 155 wallets and presently the country utilising the most wallets in Africa is Ghana, which is utilising eight.
The successful implementation of Smartpay’s electronic banking concept could be a major stride towards the country becoming a cashless society.
Financial experts argue that cash is expensive — a cost on society — and should be replaced by a cashless society as processing a transaction on a card is cheaper than handling cash.
In a report, the European Commission last year calculated that the total cost to society of all payment methods including cash, cheques and payment cards equates to between 2-3 percent of gross domestic product (GDP).
To put this figure into context, the entire European Union agricultural sector equates to 2,1 percent of GDP, which means the EU member states spend more on payment costs than it does to produce food.
Market watchers believe Zimbabwe needs UEPS technology as a sanctions busting measure, as policymakers will need not to worry about importing US dollar notes and coins as we move to a cashless economy, with added features such as ability to transact where there is no connectivity.
In Ghana, Net1’s UEPS was endorsed by the Bank of Ghana (Central Bank) leading to the formation of Ghana Interbank Payment and Settlement System (GhIPSS). A subsidiary of the Bank of Ghana was established to manage the National Switch (e-Zwich).
All banks in Ghana run on the e-Zwich system, and Barclays Bank runs what are known as Susu bank accounts on the back of the system for informal traders such as those of Mupedzanhamo, Mbare Musika and makorokoza in the mining sector.
In Botswana the system is used to provide insurance to villagers and social grants through Choppies supermarkets, while in Malawi the system is used for the distribution of anti-retroviral drugs, inputs and payments for agro inputs and produce. It is also used for fuel by BP Malawi and trades as MalSwitch under the custody of the Malawi central bank.
In South Africa four million pensioners use the smartcard as an account and need not travel further than their local areas.
Ms Mutizwa said her organisation will enter into an agreement with them for retail penetration of the previously untapped rural and remote markets, thus providing financial inclusion.
She added that Smartpay has already sealed a deal with a State-controlled financial institution where the physical cash sits before it is created on the electronic card as e-Value.
“It is Smartpay’s wish to see all banks on the switch to provide a convenient and secure form of banking to every Zimbabwean citizen. Net1’s integrated switching, settlement, clearing and smart card payment system is rapidly attracting central banks, banks and governments worldwide.
“The solution offered entails a country deploying one integrated infrastructure with multiple users making use of the various applications, products and services provided.
“The UEPS technology provides a turnkey solution enabling a common platform for all electronic payments, as well as broadening the scope for branchless banking across the country. It makes sense for banks to team up with countrywide distributors that can accommodate in their branches/ outlets a bank agency desk to open and register bank accounts as well as offer all the products and services. This allows Zimbabwe to rapidly bank the majority of their population in the most cost-effective manner,” explained Ms Mutizwa.
She added that the system makes use of smart card technology and offers proven and tested “state-of-the-art” security protocols.
“It is important to note that the security of the system is not dependent on the POS and automated teller machine (ATM) hardware infrastructure or back-end host. The security will occur between the two smart cards transacting with each other.
“Biometric fingerprint technology will also be used as the method of identification throughout the entire system. Above all, offline and online and Real Time transaction processing will enable all citizens to open a smart card bank account and transact anywhere, anytime in the urban, semi-urban, rural and deep rural environments of Zimbabwe,” she said.
NET1 is a technology company based in South Africa which is also listed on the NASDAQ Stock Market that provides its (UEPS), as an alternative payment system to address numerous government initiatives which focus on enhancing the lifestyle of their poorest citizens, establishing transparent systems of government and transforming rural towns and villages into vibrant and integrated economic zones.
NET1 believes that it is the first company worldwide to implement a system that can enable the billions of people who generally have limited or no access to a bank account to affordably conduct electronic transactions with each other, and other financial service providers.
The NET1 offline settlement system will also enable all merchants and financial services companies situated in deep rural areas to participate in the system without the need for network connectivity and not only completing transactions off line but on Real Time.
Experts opine that the NET1/ Smartpay system will allow the financial institutions to tap securely into an “untouched” market to create local capital by deposit mobilisation of the monies in the informal sector.
“These deposits will be resident in a trust account in the participating banks.
“The value for each user is stored on the smart card, allowing the banks to reinvest the deposits generated and grant affordable loans to small and medium businesses.”
Labels: BANKING, PAYMENT SYSTEMS
Read more...
Rupiah commends ZRA’s increased revenue collection
By Fridah Zinyama
Fri 02 Apr. 2010, 04:01 CAT
PRESIDENT Rupiah Banda has said Zambia’s tax revenue collection measured as a percentage of the Gross Domestic Product (GDP) has moved from 13 per cent at the inception of Zambia Revenue Authority (ZRA) to an average of 18 per cent.
And ZRA and Access Bank have signed an e-payment solutions agreement which will allow tax payers to pay their taxes with the bank.
During the ZRA second Taxpayers Appreciation Day at Mulungushi International Conference Centre yesterday under the theme ‘Recognising and Encouraging Voluntary Compliance in Revenue Collection’, President Banda, who was represented by commerce minister Felix Mutati said the current Authority’s revenue collection contributed 70 per cent to the national budget.
“It is thus evident that ZRA has managed to increase revenue collection and has performed above the set targets in most of the years of its existence,” he said. “The critical role ZRA plays in the provision of the resources for the budget and thereby in national building cannot be overemphasised.”
President Banda said the government recognises and appreciates the various initiatives that had been implemented through reforms and modernisation efforts at ZRA.
“I can confirm that my government works closely with ZRA on matters of tax law reforms and on the simplification of tax laws to enable officials apply tax laws in a fair, equitable and transparent manner,” he said.
President Banda noted that ZRA had continued on the path to integrating its operations and segmenting taxpayers according to size.
“Proof of this is in the establishment of the Large Taxpayers Office (LTO) last year and also in the Medium and Small taxpayers offices launched today,” he said, adding that it was a pleasing development as government had been looking forward to the successful establishment of the Medium Taxpayers Offices (MTO) and Small Taxpayers Office (STO).
President Banda said there was no doubt that ZRA needed to focus attention on the taxation of the informal sector.
“We are alive to the fact that taxing the informal sector is a challenge that calls for concerted efforts; but are confident that ZRA will rise to the occasion,” President Banda said. “ZRA must focus on this category of taxpayers as it also has the potential to contribute significantly to the national treasury and possibly mitigate the burden of the formal sector.”
President Banda said apart from enhanced taxpayer education services, ZRA should build capacity to administer the integration of tax operations at the district and regional levels for small and medium taxpayers.
And ZRA Commissioner General Chriticles Mwansa said in an effort to improve their service delivery, the authority would introduce a new product in partnership with Access Bank.
“We have discussed with all the banks and floated this idea to them to participate and Access Bank has already met the requirements,” he said. “Other banks will join on this platform as and when they fulfil the requirements.”
Mwansa explained that through this facility, taxpayers would be able to effect payments of customs duties though banks or through the internet.
“We hope that we shall increase revenues and create a predictable expectation of our contribution to the provision of resource to government,” he said. “It is against this background that we will continue with our efforts to modernise our tax administration systems and procedures, enhance corporate governance, improve professionalism and productivity of our staff as well as make our work environment not only safe but also conducive to production.”
Mwansa added that ZRA had embarked on strategies to reduce the cost of doing business in the country in line with the government policy.
“The authority remains resolved in its determination to improve service delivery and implementation of legal provisions relating to tax administration,” he said.
Mwansa said simplified systems and partnerships with taxpayers and the general public were critical to encouraging taxpayers to dutifully discharge their tax obligations.
“We have in place a modernisation programme aimed at improving our overall service delivery to the taxpayers and implementing policies and procedures to ensure effective tax administration and an overall expansion of the taxpayers base,” said Mwansa.
Labels: ACCESS BANK, PAYMENT SYSTEMS, RUPIAH BANDA, ZRA
Read more...
COMMENT - I disagree with mrs. Nkunda. People didn't just 'get ahead of themselves' and created hundreds of trillions of dollars in toxic assets - several times global GDP (which I think is 60 trillion dollars). This is about the disastrous effects of neoliberal policies - deregulation, privatisation and corporate free trade. This happened in the 1920s, 1980s, and now it happened again. Neoliberalism has failed again, and we're lucky if the global economy makes it through this time. There is no need to try again.
LuSE to integrate trading sessions into national payment systems
Written by Kabanda Chulu
Friday, May 29, 2009 4:28:41 PM
TRADING sessions at the Lusaka Stock Exchange (LuSE) will this year be integrated into the national payment systems in order to enhance integrity of the capital markets by separating securities from payment systems.
In an interview in Lusaka, LuSE general manager Beatrice Nkanza said there was need to start transacting the way foreign investors did in their own environments when conducting business at the capital markets.
“Things have really been shaken including capital markets and LuSE is affected since we are part of the global network and we have people who are investing in those markets and they are doing that in the so called emerging markets including ours but we will be impacted by the changes going out there like banks, companies going under, markets are affected hence there will be regulatory changes that will impact even on those of us who have been compliant and what those changes will be remains to be seen,” Nkanza said.
“There is nothing wrong with the systems out there but people just got ahead of themselves and ignore rules hence getting into problems so restructuring will enhance and compel players to abide by the rules which we have been doing here and soon the central depository bill will be enacted and what it does is to separate payment and settlement systems thereby enhancing the integrity of markets by separating securities from payment systems. Right now we have just met the Bank of Zambia so that LuSE can be integrated into national payment system so when foreign investors come to do business, they will find that the things they do there we will be doing it here.”
She expressed optimism that confidence would soon return to the capital markets.
“Capital markets are run on confidence. Right now confidence is short because of what is happening everywhere not only at LuSE but throughout the world, as a result people have lost value - companies like General Motors (GM) have gone into turbulent difficult waters, did you ever wonder that GM, one of the biggest companies in the world, can go under, did you ever?” asked Nkanza.
“We want confidence to come back and it should come back since western governments are pumping a lot of money to resuscitate companies and financial systems and stimulate people to start doing business again. Hopefully things will soon return to normal and we hope to strengthen our systems so that we fit in smartly with what is happening globally so that when these funds start moving, they can find way to LuSE and people can get returns and profits like they expect.”
Labels: BEATRICE NKANZA, LUSE, PAYMENT SYSTEMS
Read more...
Econet seeks USD 2.5 million
AMET News
Thu, 04 Dec 2008 11:23:00 +0000
ECONET Wireless Zimbabwe is seeking funds to deploy a new modern billing system, which will cost about USD 2.5 million, for its 50,000 Business Partna subscribers. According to Douglas Mboweni, the CEO of Econet, the carrier is finding it difficult to raise the funds due to the current global financial crisis.
Econet migrated its Business Partna subscribers to its pre-paid platform last week, following the collapse of its old system. Business Partna account for five percent of the carrier's base, while the pre-paid Buddie and Libertie customers form the major share of it.
In addition, the carrier requires funds to address other issues critical to the existence of the network. The available resource at hand is being used by the company to save the switching system. - AMET News
Labels: ECONET, INVESTMENT, PAYMENT SYSTEMS, ZIMBABWE
Read more...
'Effect clearing systems to enhance Zambia's trade ties'
By Joan Chirwa
Monday August 06, 2007 [04:00]
ZAMBIA Revenue Authority (ZRA) has said the effective implementation of its clearing systems would supplement the existing trade relations between Zambia and its neighbouring countries. ZRA commissioner for customs services Muyangwa Muyangwa said the high levels of trade between Zambia and other countries in the region needed increased participation of all stakeholders.
“Zambia is experiencing an inflow of trade and investments and as ZRA, we don’t want to hinder trade but we want to be part of the trade facilitation process,” said Muyangwa at a quarterly media briefing held in Lusaka last Friday.
Muyangwa further said ZRA worked towards establishing strong systems that would avoid leakages of government revenue. He said the revenue-collection agency was concerned with the unaccountability of government resources and hoped the trend could change if strict compliance measures were put in place in different institutions.
Muyangwa said the authority’s implementation of the automated system for customs data (Asycuda) had enhanced operations at most border posts around the country.
“We are also working on risk management and compliance management systems. The main reason for this is to ensure we have an environment which aims at simplifying processes,” said Muyangwa.
And commissioner for domestic taxes Wisdom Nhekairo said the authority had encountered numerous difficulties in the collection of presumptive tax from towns along the line of rail because most of the business transactions were done in undesignated areas.
Labels: ASYCUDA, PAYMENT SYSTEMS, REGIONALISM, TRADE, ZRA
Read more...
Pelete calls on FRA to identify additional paypoints for farmers
By Florence Bupe
Wednesday May 16, 2007 [04:00]
KALOMO district commissioner Oliver Pelete has called on the Food Reserve Agency (FRA) to identify additional paypoints around the country for farmers to receive money for maize supplies to prevent delayed payments. In an interview, Pelete said it was imperative for FRA to ensure that there were adequate paypoints to prevent congestion at the few banks available in rural districts.
"FRA should come up with a list of institutions other than banks to help pay out farmers during this year's maize marketing season to ease farmers' access to their money," he said.
Last year, there were complaints from farmers around the country over delayed payments, a situation they complained adversely affected their ability to procure farming inputs in time.
Pelete, however, welcomed the K38,000 floor price for maize and said farmers would be able to realise reasonable profits from their sales.
He also expressed pleasure at FRA's decision to increase the number of depots in the district. He urged small-scale farmers in the country to desist from selling maize to unscrupulous buyers and warned that they may be swindled of their produce.
And Pelete said Kalomo district had already started receiving inputs from the 2007/2008 farming season. "Kalomo district started receiving inputs for the next farming season. We have so far received 8,000 by 50 kilogramme bags of top dressing fertiliser. We are hopeful that the timely delivery of farming inputs will revamp farming activities in the country," said Pelete.
Labels: FRA, MAIZE, PAYMENT SYSTEMS
Read more...
