BANKS are once again up in arms with Econet Wireless over the mobile phone operator’s refusal to give them access to its network platform to freely roll out their financial products. This comes as Zimbabwe’s biggest mobile phone telecommunications operator has been rolling out a number of mobile phone-based financial services for its eight million subscribers including EcoCash, EcoCashSave and more recently EcoCash Payroll.
Financial institutions, through their lobby group Bankers Association of Zimbabwe, have for long expressed reservations over limited access on Econet’s network.
While no official comment could be obtained from either Econet or BAZ, highly placed banking sources said negotiations were underway. However, Herald Business understands that banks wrote to the Reserve Bank of Zimbabwe, again registering their complaints about Econet’s stance towards them.
Recently, BAZ president Mr George Guvamatanga said Zimbabwe does not have a legal framework that governs mobile banking services, opening up the sector to unacceptable practices.
“There is a feud in the market as banks are up in arms with Econet over its refusal to give them equal cost-effective and tamper- free access to its network for the delivery of mobile-based services,” said a source privy to developments.
“Econet is literally saying to banks, build your own network; this is pretty much like the Government or National Railways of Zimbabwe saying to someone who wants to go to Bulawayo by train build your own railway line.”
According to the sources, Econet does not want players with equal financial muscle on the market to compete with its mobile phone-based financial product, particularly, EcoCash, because “they want to monopolise mobile space”.
Analyst Jerome Negonde said Econet’s stance was morally wrong as the telecommunications firm was using a public frequency spectrum that belongs to everyone. Their position is said to be helping them maintain high costs for mobile banking services and that ultimately borders on monopolistic behaviour.
However, Econet chief executive Mr Douglas Mboweni once said banks could have access to its network platform through EcoCash and that financial institutions were free to use it.
“There’s a huge misunderstanding in terms of the definition of a gateway. As Econet the gate is EcoCash. Therefore, financial players who want to launch their MMTs can use EcoCash as the platform. We allow banks to transact using EcoCash even launching their own MMTs, but on the same platform. It has the capacity.
“Obviously, some have said they want another gateway; well, they are free to invest in one,” Mr Mboweni said then.
He added that it was important for financial institutions to understand that infrastructure varies between companies. “Those who have opened up their gateways have infrastructure for MMT that is lying idle.”
Analysts say instead of trying to compete with a money transfer system, banks need to concentrate on making their core business relevant in today’s market.