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Africa Moyo in Victoria Falls
THE Reserve Bank of Zimbabwe (RBZ) is negotiating with banks to further reduce costs on point of sale (POS) and Real Time Gross Settlement (RTGS) transactions, especially as volumes of such transactions have skyrocketed in the last few months due to persistent shortages of paper money, a top official has said.

RBZ director (financial markets), Mr Azvinandawa Saburi, – who was one of the panelists during a discussion on “Monetary Policy interventions: Currency reforms and incentive systems” at the Zimbabwe National Chamber of Commerce (ZNCC) annual congress here yesterday, said the apex bank was happy with the surge in cashless transactions but is engaging banks to further reduce the costs.

Mr Saburi said plastic money usage has increased at the moment compared to cash, with transactions hovering between 60 percent and 80 percent.

“If you go to fuel stations as an example, they are having 65 percent to 70 percent of transactions not (involving) cash. Cash is only 20 percent or 25 percent.

“So, there has been a substantial increase in the usage of plastic money (but) I know, related to the usage of plastic money, there is always the issue of charges.

“We have had discussions with the banks and these charges have been coming down. What we have asked the banks to do for transactions which are below $10, we are saying they are charging 10c because we know when someone is buying bread for 90c, if you charge him 30c or 40c, it doesn’t make sense,” said Mr Saburi.

“But even the 10c, which they are charging for transactions that are below $10, it’s also a high charge when you convert it to a percentage. So we are working behind the scenes with different authorities who are involved in this . . . so that they reduce those charges.”

Last year, the RBZ capped transaction costs on POS transactions at 10c for purchases below $10 so as to broaden the use of plastic money as part of measures to arrest paper money shortages.

Zimbabwe has been battling paper money shortages since April last year, and the RBZ believes the challenge can only be surmounted when producers increase exports. This saw the introduction of a five percent export incentive scheme to stimulate exports, and more importantly, dissuade exporters from laundering their proceeds. The export incentive is paid in the form of bond notes.

Mr Saburi said the capping of RTGS charges at $5 has helped push up such transactions but there is scope for a further reduction of the costs, and the RBZ is engaging banks to slash the charges.

“Some banks were charging about $15 . . . I know the charges are still high at $5 but we are encouraging the banks to reduce those charges because we have discussions behind-the-scenes (with them).

“If you look at the plastic money, when transactions increase substantially, what it means is they (banks) are generating more revenue from that and it follows that they should reduce the charges as well, but we will continue with the discussions,” said Mr Saburi.

Some depositors have complained that while the RBZ has capped the RTGS transaction costs, banks have made it the flat fee and charge the same amount even when one is transferring $20.

This has seen cash queues persisting at banking halls as most banks charge $1 for a $100 cash withdrawal, which eventually makes it cheaper to get physical cash and settle one’s obligations.

Meanwhile, the ZNCC annual congress ended yesterday and several recommendations including having all Government departments attending future congresses were proposed to help transform the economy.

Industry and Commerce Deputy Minister Chiratidzo Mabuwa and Mines Deputy Minister Eng Fred Moyo, were some of the few top Government officials who attended yesterday’s sessions.