Zimbabwe’s Econet Wireless and the making of Africa’s first cashless society
Tuesday, August 19, 2014
Will Zimbabwe be Africa’s first cashless society? Telecommunications company, and now mobile banking service, Econet Wireless predicts that in less than 12 months notes and coins will be long-gone from this southern African country. “We do not expect anyone to still be using paper money in a year’s time,” the company’s CEO Douglas Mbowenirecently said. “It will be just like Europe or America, where you no longer see people carrying bundles of cash.”
The collapse of Zimbabwe’s economy in 2002 paved the way for Econet Wireless’s mobile payment system. “Hyperinflation had destroyed people’s confidence in financial institutions,” said the Zimbabwe company’s founder, Strive Masiyiwa, at the Mastercard Foundation Symposium on Financial Inclusion in July.
“The lowest denomination circulating was $1,” Masiyiwa said. “If you want to buy a packet of sweets for your child, you can’t get change.” The company set up a mobile payment system that handles small amounts and allows people to save as little as $1. “Today 43% of the GDP moves through Econet Wireless,” he concludes.