Government has been lauded for allowing innovation in the digital payments space as this allows the digital economy to flourish and help policy makers to come up with right policies.
Visa Inc’s Southern Africa general manager Jabu Basopo, applauded the approach by the Government in an interview with The Herald Business on the sidelines of the recently concluded Zimswitch Payments Conference in Nyanga.
“Activist governments are pushing the agenda for financial inclusion. They are pushing innovation. They’re governments that are looking at new technologies instead of leaving it to the banks, Fintechs or financial services industries that are supposed to be driving those agendas. At times, such governments probably find that the progress is very slow and they have to come in.
“If you look across the world, you now even have governments that are setting up innovation hubs within their own operations and experimenting with new technologies so that they’re ahead of the game,” said Mr Basopo.
His sentiments come at a time when the Government recently announced that the construction of innovation hubs in six tertiary institutions throughout the country is nearing completion.
Higher and Tertiary Education, Science and Technology Development Minister Professor Amon Murwira, said innovation hubs are meant to bridge the gap between theoretical knowledge and industrial skills.
The Transitional Stabilisation Programme (TSP) enunciated by the Ministry of Finance and Economic Development also recognises that the digital economy offers immense opportunity for growth to the entire economy, against the background of the role ICT is revolutionising global business and offering multiple products and services.
Already, Government has started introducing fiscal incentives through the Finance Act of 2018, allowing tax deductibility of expenditures related to technical and support services availed to promote entrepreneurship in the ICT sector.
Mr Basopo further encouraged players in the digital payments ecosystem to take advantage of the unmandated space offered by the Reserve Bank of Zimbabwe (RBZ). He pointed out that mandates create monopolies and the central bank has been smart in that they understand those dangers.
“If you look at the central bank of Zimbabwe, they have not mandated the way the payments are processed in the market. We have players like Zimswitch, which take up a national position in terms of processing national payments. The central bank has never said to all banks you’re forced to use Zimswitch.
“In other countries like Zambia, the central bank has mandated that all banks should process payments through the recently introduced national payments system. Mozambique has the same and where you have a mandate it comes with a lot of disadvantages. You’re actually blocking that innovation we are talking about because people are forced into this mandate and they’re getting a service that is the same whereas banks are demanding to differentiate their products,” he said.
Meanwhile, Mr Basopo described the Zimswitch Payments Conference as a brilliant initiative that breaks down silos and fosters collaboration.
Said Mr Basopo: “Zimswitch has done a great job in bringing all these players together. If you come together each person, each organisation articulating what they do and how they’re doing it you begin to understand the pain points and probably someone has got the solution.
“The most important take away, for me, is what we need to embrace and get comfortable with is if I was earning a dollar as a company playing in the ecosystem I need to be comfortable with the fact that it’s no longer a dollar. I need to be earning twenty cents because they’re other parties that are going to be needing that part of a dollar. Instead of pushing the cost to the consumer and increasing the dollar to two dollars.”
E-Solutions chief executive officer Mr Sifiso Mlotshwa also noted the importance of the annual conference as the only platform that brings together business operations people and Fintechs.
“I think it’s fantastic and I wish there could be more youngsters being brought on board because there are big opportunities if the space could be opened up for young people who see things differently and can innovate. We want these technology related companies to be more serious in driving job creation in our market. We need to come up with a way for companies to support either through partnerships with startups, solidify their skills and bring up their work in terms of quality,” said Mr Mlotshwa adding that industry is exporting jobs.
He said the conference also facilitates banks to start seeing things differently.
“This will kind of aide in opening up their thinking in terms of collaboration with Fintechs and make them realise their constraints and the potential which is there in working with Fintechs. Looking back from the way banks used to engage and assessing what’s happening now, it’s making banks ask themselves questions on how they could be get more traction in the market and how they could serve their customers better,” said Mr Mlotshwa