Ecocash was set up during a time when cash was abundant and the ATM machines were spewing out almost infinite amounts of cold hard American currency. The very idea of Ecocash is a throwback to an era that no longer bears any resemblance to the current reality on the ground. Zimbabwe has been hit by an almost unprecedented cash crisis. This cash crisis has changed the rules of the game and as such very inconvenient questions are being asked of Econet’s money transfer service.
Every story has a beginning and to find Ecocash’s beginning one has to look at the nature of financial inclusion in the Zimbabwean economy. The vast majority of Zimbabweans live in rural areas and this therefore means that they do not have access to brick and mortar traditional banking services. This factor along with wide mobile phone usage is the only prerequisite for a mobile money transfer service to be implemented. Ecocash sought to replicate what Mpesa had done with Kenyan market. Introducing those folks living in what Joseph Conrad imagined to be the heart of darkness to basic banking services is what led Ecocash to be successful in Zimbabwe. This eventually saw it move cash volumes north of a billion dollars.
At the heart of the narrative of Ecocash was the promise to move money instantly across the length and breadth of the country with minor impediments. This is what the service was based on. The ensuing cash crisis basically means that Ecocash is failing to deliver on this fundamental promise. This is simply because agents do not have cash to dispense to those wanting to cash out. Ecocash agents are now being forced to close shop because of the lack of business. What this essentially means is that the service that Ecocash was built around is no longer being provided. Ecocash therefore becomes useless to the vast majority of its customers. This will lead Ecocash to fail in this cashless Zimbabwean environment.
The cash crisis will be the immediate reason for the demise of Ecocash. However there are other deeper reasons in the rabbit hole that explain why Ecocash will fail. The Zimbabwean economy is in a comatose state. The cash crisis is just one symptom of this. Ecocash needs a strong and vibrant economy to sustain it. Zimbabwe’s economy is the antithesis of such an economy. People cannot send money when they are unemployed. People cannot send money when they do not have enough to feed their own families in the city let alone the rural folk. Heck, People cannot send money when they are in a bank queue to withdraw money to cash into Ecocash. At this point the absurdity becomes clear and Ecocash’s days become numbered.
In addition to this, the cash crisis means that the RBZ will continually seek to gain greater control over all the cash flows available within the country. This will ultimately mean greater regulation and maybe even fatal over regulation for Ecocash. If you throw into the mix the current hostilities that Econet is engaged in with POTRAZ and the ministry the room for expansion and innovation for Ecocash becomes stifled.
However Econet wisely made Ecocash more than just a money transfer service. Bill payments and airtime purchases were added by somebody who deserves a promotion. The ability to pay bills in the comfort of one’s lavish and plush abode became a secondary selling point for the service. In addition to this Ecocash introduced a card with the MasterCard service for those that need to make online payments. These supplementary services helped Ecocash congeal and seemingly dominate and they might form a foundation for some sort of reincarnation for the service. There is only one problem to this however and it is called the banking system.