Zimbabwe Mobile Payments Surge Thanks to Bitcoin Push, Cash Shortage
For a long time, Zimbabwe was home to way, way too much cash. There was a $100 trillion Zimbabwean banknote, for crying out loud. Now, however, Zimbabwe seems to be having the exact opposite problem in the form of a cash shortage, and that’s got plenty of Zimbabweans looking to mobile payments to fill the gap. However, it’s not just the cash crunch that’s got Zimbabweans looking to mobile payments but also the surprising popularity of bitcoin in the region.
At last report, Zimbabwe has processed a combined total of $11 billion US in both mobile payments and electronic payments in general so far over the last nine months, so says word from the Zimbabwean Reserve Bank.
This represented a combined transaction total of 485 million separate transactions—up 62 percent from the same time last year—and was mainly in response to a cash shortage that’s been ongoing in the country for some time now, and one that’s got locals turning to mobile to handle local transactions.
However, those mobile payments are also increasingly going to buy bitcoin, which is proving useful as a means to bypass several issues seen around international payment issues. Reports from Zimbabwe’s sole bitcoin exchange, www.golix.io, reportedly notes that over $1 million US in bitcoin trade was transacted back in October.
Basically, it’s a perfect storm of sorts for mobile payments. Not only is the situation in Zimbabwe something like the situation in India when the government demonetized large portions of its currency—the net effect in both countries was a sudden and marked cash shortage—but Zimbabweans are also putting some of that cash into cryptocurrency to let it more freely flow across the border. Given that Zimbabwe shares borders with Botswana, Mozambique, South Africa and Zambia—there’s also a tiny sliver of sharing with Namibia in the west—that represents a lot of cross-border traffic to consider.
Thus mobile payments not only show their value as a day-to-day operation, but also as an investment option as well, allowing Zimbabweans not only the ability to readily cover basic costs, but also to help move cash from one place to another and take on an investment property that may help beat inflation.