Plastic Money for Micro Transactions
Steward Bank launched a mobile payment system which allows informal traders and small to medium enterprises to hold small transactions. Called Kwenga, the system enables a sale at any amount and is being introduced to help vendors and public transport users embrace plastic money. It makes possible transactions even lower than 5 cents, a facility which accommodates informal traders from barbers, vegetable vendors and other people whose costs can be lower than $1.
Although the use of plastic money has risen considerably over the months which the country has been battling the obtaining cash crisis, there has been a grey area which the conventional systems failed to address. This mobile transaction platforms seeks to plug those loopholes and allow small scale retailers to claim a place on the plastic money table.
Steward Bank Chief Executive Officer Lance Mambondiani said the idea will revolutionise the way point of sale transactions are being handled in Zimbabwe. “Our philosophy has always been simple, we take innovative ideas and make them accessible to a mass market. We saw that the popularity of point of sale machines was being reneged by the cost of acquiring the machine which is around $600.
This suited large scale retailers and in a way alienated informal traders, so Kwenga comes as an inclusive solution with machines starting at $35,” Mambondiani said.
“We have been working with a lot of partners and this seeks to ensure that informal traders do not send people away on the basis of an incompatible payment method. This product is called Kwenga because it is the local colloquial for swiping,” he said. The Ministry of Finance and Economic Planning, were at the launch implored to scrap the five percent tax on transactions below a dollar.
“As a way of encouraging the use of plastic money for any kind of transaction, as Steward Bank we have removed charges on any transaction below $1. I would like to take this opportunity to challenge the Ministry of Finance and Economic Development to remove charge for other banks as well,” Mambondiani said. Deputy Minister of Finance and Economic Development, Terrence Mukupe said with innovations of Kwenga`s calibre their 100 day plan to expand the point of sale uptake remains on course.
“When we were doing the 100 day plan, I remember we looked at the stats and saw that there were only about 43 000 point of sale machines. My minister said we should target a 20 percent increase but I put my head on the block and said we should target 100 000. These are innovations which will help us reach our target as we continue to look into how we can play our part to increase the uptake of point of sale machines,” he said.
Steward has already teamed up with local businesses which transact small amounts as part of their rollout strategy. Among those courted there is local transport operator, Pamushana Africa who have been piloting the system in their commuter omnibuses since January 8 this year. Mr Hardlife Chipika, Pamushana Africa`s Director said the system has been working smoothly since they started using it in their commuter omnibuses.
“The feedback from our passengers has been positive, people are embracing the Kwenga mobile point of sale system in the way we had projected,” he said.
“Transactions are taking an average of 5-10 seconds, a time which is reasonable for our kind of business. Our usual passengers no longer have the need to look for cash so they can board our vehicles with their preferred mode of payment,” he said. They are eyeing improvements on the system over time. This is just the beginning, we are told there will be more to come in as far as mobile point of sale machines are concerned. The plan will be to increase the convenience in transacting for our passengers and other people handle payments below a dollar will benefit as well,” Chipika said.
The system`s keys feature includes a sharing platform which allows multiple traders to use one machine. It also works in tandem with the Ecocash mobile money service. Merchants will no longer have to wait for the bank to process their money, the transactions are debited into their accounts. Businesses which will take up the idea will be incentivised for transactions and can get the machines on loan.