Nowadays we live in a world where everything should be operating in Real Time-instant, this has influenced people to adopt Real Time Gross Settlement (RTGS) which is an electronic form of funds transfer where the transmission takes place on a real-time basis, as people after agreeing to a deal they just transfer money to each other and using POS (Point of Sale).
Technology in Zimbabwe over the years has been on an upward trend meaning a lot of investments has been done to the systems around with banks coming aboard with mobile applications as well as USSD codes to ease transactions.
Banks have also taken advantage of the RTGS platform with Zipit becoming more popular within the general populace in recent months.
Mobile banking has been on a week on week growth trend since the cash shortages in the Zimbabwean economy.
In a weekly report by the central bank for the week ending 3rd November 2017, the total value of transactions processed through the NPS stood at US$2 171.00 million, up from US$2 045.41 million registered in the previous week.
The NPS is an aggregator of financial transactions processed through various banking platforms per given period of time
Transactions processed through the Real RTGS system increased by 3%, to US$1 497.69 million during the same week.
RTGS payments accounted for 68.99% of the total value of transactions processed through the NPS, followed by Mobile, 19.95%; Point of Sale, 10.75%; Automated Teller Machines with 0.26%; and Cheques constituting the least 0.05%.
Due to cash shortages, the RTGS system has been growing although the mobile money is also fast growing as seen in recent weeks.
Large of the chunk that constitutes the RTGS comes from the Local stock exchange where most if not all transactions done on a day to day basis are under this system.
In terms of volumes, mobile-based transactions and POS (Point of sale) recorded an increase with 70% and 23,9% respectively which was a clear indicator that people are now embracing the use of plastic money, the whole report of the Apex bank shows us that Zimbabweans are now able to transact using RTGS and POS as the economy still faces cash shortages.
In a recent research paper published by a local research firm Equity Axis noted that the market trends around the movement of money in the economy largely remains the same although there are interesting observations drawn from the data.
RTGS remains the dominant platform on which the economy conducts transactions while mobile money has been the fastest growing platform. Point of sale transactions has been steadily increasing as consumers substitute cards for cash while ATMs has paled in the shadow due to cash challenges.
The firm goes on to say “Of note is the observation that the market has been steadying over the weeks post the September shock as shown by the declining trend in RTGS and other platforms in both the value and volume charts.
However, at an average of $1.86 billion in total weekly transactions outside of cash (ATMs), the economy is likely to continue facing cash challenges.
This scenario implies sustained exchange rate pressure. The continuing suspension of international payments through visa cards by most banks and other financial services providers also points towards magnified discounts on local money.
It is however encouraging that cumulative trade data shows an improving exports position and a narrowing trade gap.
A systematic approach pursued by RBZ to prioritize local producers and exporters may lead to further substitution of imports, although the increase in production, for producers relying on imported raw materials, implies increased forex demand.
Likewise most local producers have failed to tame production costs and in some instances have willy-nilly raised their mark-ups to unbearable levels (under the umbrage of protectionism) such that when a comparison is done to substitute imports, the latter’s cost is deemed more favourable, consequently giving rise to grey imports whose traders are paying a price on the parallel market to secure forex.
This cycle is likely to keep pushing inflation higher despite an improving balance of payments position, the firm concluded.