Zimbabwe’s bumpy, costly road to a cashless future

Verdict four: Swipe machines are still like casino machines. It’s a gamble, sometimes they work, many times they don’t. That discourages use.

By the time, the next morning, I had to use cash to pay for parking in the CBD, I had long given up on my challenge. The final verdict was one can’t live on cards alone, and it will be a long while until that changes.

Mangudya says he has “announced that all retailers, wholesalers, businesses, local authorities, utilities, schools, universities, colleges, service stations and the informal sector are required to install point-of-sale machines.”

In December, Zimbabwe had 16 300 point of sale terminals. Zimbabweans spent $426 million through POS terminals during the same quarter, which includes the traditionally busy Christmas period. The number of POS machines in Zimbabwe may be more now, since the December report is the latest available data. Steward Bank alone, in its ads, claims to have 10 000 of its own POS machines.  However, cash still makes up 80 percent of all transactions.

However, it will take much more than Mangudya ordering POS installations. It will take a major culture shift, a return of confidence in banks. And, until it is possible to pay for all your main bills, buy sadza, pay for groceries at downtown supermarkets, or pay police fines by card, it is unlikely we will become a cashless society soon, not even 80 percent in five years.

Retailers, especially independent stores serving the lower end of the market, buy stock using cash, and their customers too do not use cards. Confederation of Zimbabwe Retailers president Denford Mutashu was quoted recently as saying it was taking too long for retailers to access cash from card-based transactions. The financial system is still too inefficient to give them confidence.

For people to use cards, they first have to run bank accounts. This is still unattractive to many, for many reasons. Firstly, we still remember a time when you earned interest on your deposit, and not lost all of it down the black hole of bank charges. Secondly, many still have memories of losing all their savings, first to bank failures and then to the currency switchover. Thirdly, and most importantly, to use a card, you need to actually have money to keep in the bank in the first place.

Not everyone sees a bank account as a convenience. When it was ordered that tobacco farmers be paid via bank accounts, they rioted. Banks accounts are still seen as elitist, an inconvenience, unsafe and unfair.

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