The Reserve Bank of Zimbabwe has accused Econet Wireless, a dominant mobile phone operator in the country, of fueling illegal cash dealings on the streets.
It has described EcoCash, mobile money platform operated by Econet Wireless, as a Ponzi scheme that is responsible for the rapid weakening of the Zimbabwean currency.
The country’s Central Bank has gone to court seeking to sustain a directive to disable lines of EcoCash agents.
Mobile money usage in Zimbabwe has moved from just basic digital payments and rapidly evolved to include salary payments and remittances among other uses.
But now regulators accuse EcoCash of fueling illegal currency dealings on the streets with over 11 million registered mobile wallet users.
The Reserve Bank of Zimbabwe believes EcoCash is causing the spike in the parallel market exchange rate after issuing a May 4 directive for EcoCash and its smaller state owned competitor, One Money to disconnect SME agent lines transacting up to $2000 a month in local currency.
The central bank sought for fresh registration and application of agent lines and has insisted on overseeing the entire process.
EcoCash, run by the country’s Econet Wireless group, has complied with the directive, disabling the affected agent lines but has now also dragged the reserve bank to court.
The Reserve Bank while responding to matters already filed in court, described EcoCash as a Ponzi scheme under which the platform was essentially running overdrafts for the agent lines.
Financial analysts view EcoCash’s activities of giving overdrafts to agents as printing of electronic cash while acting as a’ ‘bank’.
Econet Wireless is Zimbabwe’s biggest provider of telecommunications services, providing solutions in mobile and fixed wireless telephony, public payphones, internet access and payment solutions.
Key subsidiaries of Econet include Liquid Telecom, the largest internet service and access provider in Zimbabwe and Transaction Payment Solutions, a leading provider of financial transaction switching, point-of-sale and value-added support services.