Zimbabwe has ordered mobile money operators to ensure that individuals have only one wallet and should close all multiple wallets with immediate effect.

The measure announced by the central bank yesterday in its mid-term monetary policy statement is aimed at curbing misuse of mobile money to fuel the black market.

It said it had adopted these measures following a forensic audit to assess the integrity, compliance and efficacy of mobile money platforms and transactions in Zimbabwe.

The measures announced by the central bank are:

Individuals

1. Transactions by individuals shall be pegged at ZW$5 000 per day. Individuals shall be allowed to undertake Person to Person transfers, Person to Merchant payments for goods and services, settlement of bills and purchase of airtime.
2. Following the suspension and freezing of agent and bulk-payer wallets on 27 June, 2020, mobile money operators have allowed illegal foreign currency dealers to use multiple individual wallets as a means to bypass the transaction limits and continue with their illicit transactions. Mobile money operators shall, with immediate effect, close all multiple wallets, and allow just one wallet per individual.

Merchants

• Retailers and other service providers will be permitted to continue operating merchant wallets to allow the public to pay for goods and services.
• Merchants shall not be allowed to make payments from their wallets. E-value held in merchant wallets shall be liquidated to the merchant’s bank account.
• In this regard, mobile money operators shall have systems in place to ensure automatic liquidations from the merchant wallets to the merchant bank accounts. This measure shall ensure that mobile payment platforms are not used for store of value but shall be restricted for transacting purposes in furtherance of financial inclusion in the economy.

Agents

1. Agent wallets are no longer serving any legitimate purpose and were now being used primarily for illegal foreign exchange transactions. Agents’ mobile money wallets are therefore abolished, with immediate effect.
2. Agents currently holding value in suspended and frozen wallets shall be allowed to liquidate the funds to their bank accounts, upon the Financial Intelligence Unit (FIU) having satisfied itself of the legitimacy of the source of funds.
3. Bulk payment accounts
   1. Mobile payment operators have been turning a blind eye and have even actively encouraged the abuse of bulk payment wallets for illegal foreign currency transactions, thus earning lucrative transaction fees in the process.
   2. Going forward, bulk payment wallets will be approved by regulatory authorities for limited use, primarily for low value transactions and humanitarian funds disbursements to vulnerable members of society.
   3. Any other bulk payment transactions, such as payment of salaries and wages, should be processed through normal banking channels.

   Other corrective measures

   1. The Bank, as regulator of mobile payment services, and the FIU, as the agency responsible for enforcing anti money laundering standards, will consider the findings and recommendations of the forensic report, in detail, and come up with comprehensive corrective measures for implementation by mobile payment operators, to ensure compliance, integrity and efficacy of mobile money transactions.
   2. For identified serious breaches, appropriate regulatory and disciplinary measures will be instituted against delinquent mobile money operators and /or any culpable individuals, in accordance with the law.

   Interoperability

4. On 27 March 2020, the Government passed the Banking (Money Transmission, Mobile Banking and Mobile Money Interoperability) Regulations, under Statutory Instrument 80 of 2020. The new law is intended to facilitate integration of payment systems and promote efficiency of payment services, for the convenience of the transacting public.
5. Pursuant to the statutory instrument, the Bank designated Zimswitch Technologies (Private) Limited (Zimswitch) as a national payment switch, and required all payment service providers, including mobile payment operators, to be connected thereto.
6. With all banks and some mobile payment operators already connected to Zimswitch, connectivity by all payment service providers is expected to be completed by 30 September 2020.
7. Reasons for these measures

   The forensic audit to assess the integrity, compliance and efficacy of mobile money platforms and transactions in Zimbabwe has revealed significant weaknesses in the systems of the mobile payment operators, namely Ecocash, OneMoney, Telecash and Mycash.

   The critical weaknesses that cut across the four mobile payment platforms are:

8. Non-adherence to KYC principles, characterised by, among other issues, creation of mobile money accounts using fictitious and unverified identification particulars;
9. Creation of money on the platforms (overdrafts and fraudulent /fictitious credits) which is not backed by balances in the Mobile Money Trust Accounts;
10. System infrastructure inadequacies and weak Anti Money Laundering controls;
11. Failure to comply with, including willful disregard for, regulatory directives;
12. Connivance between mobile money operator employees and customers to delay or illegally bypass account freeze orders;
13. Failure to deduct or remit statutory taxes; and
14. Rampant abuse of agent, super-agent and bulk payment wallets for purposes of trading on the foreign exchange parallel market.