Plastic money use surges 150pct after RBZ measures

Plastic money use surges 150pct after RBZ measures

HARARE, August 29 (The Source) – The use of plastic money has increased by 152 percent since the Reserve Bank of Zimbabwe (RBZ) announced measures to encourage the use of credit and debit cards as a means of reducing pressure on physical cash transactions amid a biting bank note shortage in the country.

Although the country is still grappling with a bank note shortage, which often sees long lines at banks, the crisis has eased somewhat from its early May peak, when the central bank announced a battery of measures, including reducing cash withdrawal limits and lowering card transaction costs.

The RBZ also announced plans to introduce a token currency, backed by a $200 million African Export Import Bank facility, which will start circulating towards the end of 2016 but some analysts say increased card use, among other measures, might render the hugely unpopular currency move unnecessary.

The latest available data from the RBZ shows there were 1,112,742 point-of-sale (POS) transactions in the week ending August 12. This is a 152 percent jump from the 440,354 POS transactions recorded during the week to April 29, before the central bank’s May 4 policy interventions.

In value terms, POS transactions jumped from $46.23 million in the week-ended April 29, before jumping to $88 million in the week to May 6, two days after the RBZ’s policy announcements on the bank note crisis. POS transactions now average $70 million per week, up from the average $40 million previously.

Zimbabwe has also seen a more than 20 percent increase in POS terminals since the beginning of the year, to the current 20,000 machines in commission. The RBZ says it expects the number of POS machines to reach 30,000 by the end of this year.

The Real Time Gross Settlement System (RTGS) still dominates the bulk of transactions by value, accounting for between 70-80 percent on a weekly basis, while mobile dominates the volume of business, also with between 70-80 percent of all transactions.