The incredible growth of EcoCash Zimbabwe: A chat with Econet Services CEO Darlington Mandivenga

Econet Wireless’s mobile money offering, EcoCash, is new to the mobile money scene but already making a splash. In its first 14 months of operation, EcoCash has raced to over 2 million users earning it a place amongst the world’s 14 mobile money sprinters. MMU sat down with CEO of Econet Services, Darlington Mandivenga, to discuss Econet’s unusually strong commitment to mobile money and the strategic reasons for investing in the program.

Why EcoCash?

In this first clip, Mr. Mandivenga describes EcoCash as a “strategic response to a strategic challenge.” Econet is diversifying out of the core telecom business, where ARPUs are under pressure and putting serious investment in “overlay” services such as mobile money.

Why is EcoCash being built as a separate entity from the core telecom business?

Econet Services (which houses EcoCash) has been set up as a separate company entirely from Econet Wireless (which houses the traditional telecom business), with its own resourcing and governance. Given the size of the opportunity that Econet sees in mobile money, Mr. Mandivenga describes how this structure helps to ensure the right level of focus on mobile money within the overall business, has been a critical success factor for EcoCash.

How far has EcoCash come since launching 14 months ago?

Mr Mandivenga shares the figures for EcoCash’s first 14 months of operation: Over 2 million subscribers and 7 million transactions ($150 million in value) per month. Econet believes these figures will grow with the introduction of new use cases, in particular merchant payments.

What level of investment has Econet made in EcoCash?

EcoCash’s rapid customer acquisition is driven by a high level of investment in customer acquisition and building the distribution channel.   EcoCash is giving away 80% of their revenue to the agent network in the form of commissions to help build a robust and accessible channel.   Asked whether such remarkable growth would have been possible without Econet’s level of investment in the program, Mr. Mandivenga responds emphatically: “That’s a big no.”

How is relationship with Zimbabwe central bank?

Mobile money is an important contributor to the Zimbabwean central bank’s (RBZ’s) financial inclusion goals. Here Mr. Mandivenga describes how the RBZ has created an open, collaborative dialogue with Econet and calls for their continued support as they innovate and introduce new services.

What are Econet’s ambitions for EcoCash?

Econet is an ambitious mobile money provider. Mr. Mandivenga’s ambition for mobile money goes way beyond P2P transfers – he wants EcoCash to be the “dominant payment system” in Zimbabwe and Zimbabwe to be the “most cashless society in Africa.” He alludes to the “change problem” in Zimbabwe, where since the dollarization of the economy coins are in short supply and retailers are unable to provide change to shoppers. Might mobile money solve the change problem?

Advice for other C-Level executives on mobile money?

Mr. Mandivenga advises that CEOs need to take the long-term view and understand why they are in the mobile money business and what they hope to achieve.

Congratulations to the EcoCash team for bringing an exciting new service and such energy to the mobile money industry. Expect to hear more about EcoCash from MMU soon.

Join the Conversation (4 comments)

  • Kevin Terry says:

    It is a great pity that the whole story isn’t being told. Econet are unfortunately against interoperability in the mobile payment space. What this means is that whilst it will allow banks to use the Econet USSD Channel for Balance enquiries, Mini statements and of course prepaid top ups, they will not allow P2P payments as it appears that they don’t want bank competition in that space. On the back of this monopolistic practice, they can then charge what they want without fear of competition. Banks are already signed up for P2P transactions with the other two mobile networks in Zimbabwe allowing free competition over things like pricing and being able to use multibank agents. So before you congratulate them and believe that they have the interests of the underbanked at heart, perhaps someone should be asking why they don’t want the banks to compete!Those banks offering this service on other networks are doing so at prices that are way cheaper…..!

  • Gunnar Camner says:

    @Kevin Interesting comment, thank you for your input, it gives more perspective on this market. Your comment touches on the issue of channel access rather than interoperability if I interpreted it correctly, as what you’re describing is an issue with functionality of the USSD channel for banks provided by Econet, not integration with Ecocash directly. The USSD channel is a great tool to reach customers, but it is not the only tool available for banks and 3rd parties keen to extend services to unbanked, as UBL has demonstrated in Pakistan by using a variety of channels such as over-the-counter transactions, companion cards, web and IVR.

    Abusive or non-competitive behaviour by any player is harmful to the market. Unfortunately, I am not familiar enough with competition law in Zimbabwe to comment on whether this would constitute anti-competitive practice.

    The recent growth of Ecocash shows that they are doing something quite successfully in the market that no one did before – that is always worth pointing out and hopefully it will trigger other efforts in Zimbabwe to increase access to financial services.

  • @Kelvin. Your comments are very interesting. Econet as an MNO has built a subscriber base of approximately 8 million and invested in the forgotten corners of Zimbabwe through investing millions of dollars over the years. Most banks including CABS have failed to penetrate the rural market over the years mainly because they argued that the revenues in the rural areas are low and the costs of running the brick and motar bank branches are very high. The interoperability question is more about the channel being used to process transactions. FNB in South Africa developed a mobile application which can use even Wifi to cprocess transactions the question that comes to mind is whether you have considered these other routes for your products or maybe you want to throw spanners at a successful product built by organisations with long term vision. As @Gunnar states there are many channels to be used Easypaisa in Pakistan has over the counter channels similar to your TextaCash option. To me I believe you are becoming a cry baby rushing to look at uncompetitive practices and maybe the regulators to stifle innovation which benefits the neglected masses int he rural areas. Everyone knew mobile money would come to Zimbabwe maybe you could have bought a small network like Africom and launched your mobile products. Econet invested for its benefit also and I understand currently from what you saying they actually offering you some form of P2P connection. I wonder what it takes for banks to build their own USSD gateways and connect to the Econet gateways to facilitate the transactions. USSD will not be around for a very long time Mr Terry because the world is moving to Apps! Wonder if you will be crying like this when 50% of the Zimbabwean market has smart phones. You will be saving Econet is refusing you access to internet. I think we need to give credit where it is due Mr Terry. CABS and other banks have never come up with something which competes with EcoCash or is near EcoCash. At least you could just congradulate the EcoCash team and then spell out your concerns after. That is how we do it in the Zimbabwean culture. Failure to do that in my view compromises your position in this debate and some of us will think maybe its just sour grapes. The masses in Zimbabwe are happy and as a country we are excited that Econet has come up with a globally competitive product which is putting our country on the map. We are proud of the achievement EcoCash has attained so far! All the best Mr Mandivenga and the EcoCash team!

  • Whilst there are still cries about USSD ‘blocking’ by Econet, the rest of the advanced communities are exploring and implementing NFC technologies in their societies; FNB in SA is already piloting this technology. Let us move on faster as a nation and embrace those ideas from whoever wants to make meaningful contribution(s) to the development of technology which improves peoples’ lives in our beloved country, Zimbabwe.

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