The news:
- The Reserve Bank of Zimbabwe, the country’s financial regulator, has explained in a new press release that it expects online payment platforms to start processing transactions smoothly on Friday, April 12, 2024, as the country adjusts to the new currency, Zimbabwe Gold (ZiG).
- The central bank also noted that the banking sector and Payment Systems Providers (PSP) continue to make satisfactory progress in converting customer Zimbabwe Dollar (ZW$) balances to the country’s new currency.
- On April 5, 2024, the apex bank released a monetary policy statement to announce its gold-backed currency, the country’s latest attempt to staunch the inflation of its currency.
Following the pronouncement of the new currency by John Mushayavanhu, the Reserve Bank of Zimbabwe Governor, banking across the country was disrupted as lenders scrambled to convert all Zimbabwe dollar account balances to the new legal tender.
Consequently, online payment platforms in the country couldn’t process transactions with the erstwhile Zimbabwean dollar. Thus, consumers were unable to pay for goods and services online.
Lenders and other payment providers in Zimbabwe clarified that they could not support online payments since they had to adapt their systems to the new currency.
The statements signed by Mushayavanhu allowed Zimbabweans a transitional period of up to 21 days to convert their ZW$ notes and coins to ZiG.
Some Zimbabweans have reportedly spoken out against what has been described as a zero-sum approach to implementing the new currency.
ZiG will be available by April 30, and customers won’t make online payments while their bank balances are being converted to the new currency.
It begs the question, how will Zimbabweans make online payments before payment platforms resume work on April 12?
Compared to other African countries such as Nigeria and South Africa, online transaction uptake in Zimbabwe has been slow as citizens prefer cash-based transactions in more stable currencies like the South African Rand, Botswana pula, and US dollar.
The general fear is that the government could convert their money in local banks to unstable currencies at any time and lose it to hyperinflation, as it has in the past.
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The emergence of online payment solutions in recent years has seen increased adoption in the country. Ecocash, Innbucks, and O’Mari are some popular options in Zimbabwe.
