There’s an African proverb that says, “If you want to go fast, go on your own. If you want to go far, go together.” FinTech companies are taking over vast proportions of the financial services sector market share. This has resulted in banks losing a significant share of their fee and commision income. The race has even tightened in a cash-lite economy where the use of electronic means of transacting has scaled up. According to the findings from the Reserve Bank of Zimbabwe in their review of the National Payment System mobile money banking values and volumes are increasing tremendously recording at least a 60% value growth every quarter in 2017. RTGS a platform accorded by banks, however, remains the dominant force in driving value.
When the global economic crisis hit big Mobile money started to grow and it is still the best, convenient way a lot of people will choose to transact, with mobile phones being the biggest technology in Africa so far. Banks should invest more in their mobile banking platforms to increase convenience to their customers and for them to acquire more revenue/income.
Eyetro Digital’s projections are that in a decade later if banks don’t merge fully with Fintech Startup Companies they might lose balance and lots of income because of the rise of financial technology start-ups. FinTechs, companies have shown such great growth in such a short time, the companies are able to break into with innovative, groundbreaking solutions such mobile money, that introduced ease and accessibility into the world of finance by adding new and more convenient ways which they use digital devices to pay for goods and services.
Eyetro Digital also projects that the Mobile Money Services will come with great new ideas in ways to transact, like after agreeing to a payment you just make a sound on your phones like “Twiii” then the transactions will be complete this will be the fastest way to transact, Although some Banks in Zimbabwe might consider Mobile Money being associated with money laundering issues people still find it the convenient way to transact.
Last year between a period of 2nd and 3rd Quarter of 2017 Mobile Money active subscribers grew by 15.0% as reported by Potraz, and is expected to grow also this year with Mobile Network Operators expected to increase base stations this year, Netone has said it’s hoping to build 250 base stations in rural areas within the first 100 days of 2018 this will make the active market share of mobile subscribers to grow by adding network coverage especially in rural areas.
Our neighbouring country, Mozambique’s Mobile money volumes are growing big record an average of 34.98%, 10.92% on volumes and values, respectively.
Zambia last year also recorded an increase in its mobile money transaction but RTGS still proving that people use the service to move large amounts of money. Last year Zambia experienced an average mobile money market share on Volumes and Values of 90.02% and 13.02% respectively.
The Mobile Money Market Share uptake of these countries Mozambique with 33%, Zambia had 55% and Zimbabwe with 197% for 3 quarters ending September 2017, Resulting in Zimbabwe being the biggest user of Mobile money it clearly shows that Zimbabweans find it easy and quick to transact using the USSD.
A lot of questions have been talked of on why banks lag behind in terms of innovation, there are a lot of reasons but Eyetro Digital dag out only 2 reasons why:
- Banks aren’t flexible in the solutions they offer. Technology is changing the way services are delivered to end customers. In this respect, FinTech companies are decreasing risk and opening up new avenues to connect, offering users the kind of service they prefer.
- Banks can’t really think like a tech company. They have processes and regulations that have been operating more or less smoothly for many years, and this routine has set a trap for them. Startups are much smarter and they bring in artificial intelligence, big data analysis and the mobile-first approach, so much appreciated by younger users, especially the Millennials.
Banks and Fintech startups companies should partner given that Fintech companies have much strength in New ideas, cutting-edge analytics, Online customer acquisition, Online/Mobile UX design and Banks also have strength in Broad existing customer base, Broad product set, Low cost of capital, National Bank Act Protections, Regulatory Compliance. Given that technological innovation isn’t going to slow down anytime soon, banks have to adjust their operations and choose the path of partnership with FinTech companies. Fintech start-ups have been forcibly unbundling banking services and essentially breaking up banks’ key activities. The start-ups can deliver those individual services better and more cheaply than banks.
For banks, collaborating with Fintech startups allows them to improve product offerings, increase efficiency, and lower costs, all without making significant investments in creating new solutions themselves: banks, insurers, and payment companies noted that it would take three to four times the resources to develop the same technology that Fintech startups do in-house.
Some of the Fintech companies and Applications in Zimbabwe:
Ecocash: A mobile payment solution that allows people on the Econet network to send each other money, buy airtime or electricity, pay for bills or goods among other things.
OneMoney: A mobile payment solution that allows people on the Econet network to send each other money, buy airtime or electricity, pay for bills or goods among other things.
Zimswitch: a mobile payment system that allows a user to send money to any bank, buy airtime and other things. Zimswitch also provide internet banking solutions, Automated Teller Machines (ATM) systems and Point of Sale Solution,
Paynow: A secure online payments platform that allows you to pay for various, it is also integrated with local mobile payment solutions like Ecocash and Telecash, the platform also rides on ZimSwitch.
Bitmari: A Bitcoin-based money remittance service for the Zimbabwe market. It allows people outside the country to send money to local recipients using Bitcoin through a Bitcoin wallet.
Golix: An online Bitcoin exchange platform used by third-party subscribers to hold and trade bitcoin with other subscribers.
GetBucks: An online platform that gives people credit based on their income without the hassle of waiting in lines.
Transaction Payment Solutions (TPS): Got acquired by Liquid Telecom Group in 2007 and became Liquid Telecoms Payments. They provide an electronic payment system and Point of Sale solutions for business in Zimbabwe and Africa.
Instapay: A mobile application by Afrisoft which Allows users to buy prepaid electricity (ZESA) as well as airtime for all three mobile networks (Econet, Telecel and NetOne) with the option to make the payment via EcoCash and Telecash.