The outbreak of the Covid-19 pandemic in Zimbabwe and eventual declaration of a 21-day lockdown by President Emmerson Mnangagwa saw volumes at the country’s payment system, Zimswitch dipping 60%.
Zimbabwe has so far recorded 23 confirmed cases of Covid-19 and as part of measures to contain the spread of the virus, Mnangagwa proclaimed a national state of emergency through Statutory Instrument 76 of 2020.
This culminated in the declaration of a 21-day lockdown which has to date crippled proper functioning of the economy and Zimswitch has not been spared. Therefore the declaration of the lockdown saw Zimswitch recording a decline in volumes during the period as business grounded to a halt.
“Since lockdown daily volumes have gone down by at least 60%,” Zimswitch said. However, according to statistics availed from Zimswitch for the period January-March 2020, the prevailing liquidity crunch leading to increased use of plastic money in the market saw value of transactions processed through Point Of Sale terminals hitting about ZWL$5.5bn for the period under review.
According to Zimswitch, this recorded value in POS transactions showed an upward trend from ZWL$3.8bn recorded in January this year. The continued increase in POS transactions is also being driven by the introduction of Statutory Instrument 142 of 2019 which created a cash gap thereby leaving the market mostly relying on plastic money mainly POS and mobile money. According to the payments services company, the value of Automated Teller Machine (ATM) transactions were sitting at ZWL$14m as people were now accessing some cash notes through ATM points.
This was an increase from ZWL$12.6m in January this year. “The increase in the value of transactions probably owes to the continued cash availability challenges during that period and people opted to use digital platforms.
The picture has however changed owing to the introduction of the IMTT tax,” said an economic analyst. According to the RBZ latest weekly update, the total value of transactions processed through the National Payment Systems (NPS) increased to ZWL$21.24bn, from ZWL$20bn recorded in the previous week. RTGS transactions amounted to ZWL$14.08bn, an 8.44% increase from ZWL$12.99bn recorded during the week ending March,13 2020. In values terms, the distribution of NPS transactions was as follows: RTGS, 66.30%; Mobile, 23.34%; POS, 10.21%; ATM, 0.14% and Cheque, 0.01%. NPS transaction volumes rose by 4.56%, from 38.21m in the previous week to 39.94m, during the week under review. In volume terms, the NPS transactions were distributed as follows: Mobile, 83.81%; POS, 15.46%; ATM, 0.19%; RTGS 0.54%; and Cheque, 0.01%