Chronicle Editor
Senior Business Reporter
THE Competition and Tariffs Commission (CTC) has directed the Bankers Association of Zimbabwe (BAZ) to desist from coordinating activities of banks in terms of their selection and utilisation of electronic payment processing systems.
This comes after the regulator received a complaint against BAZ for allegedly influencing banks to adopt a uniform position of terminating individual contracts with Paynet, which resulted in collective refusal to deal.
BAZ is a trade association representing interests of banking institutions in Zimbabwe whose membership includes commercial banks, merchant banks and savings banks.
BAZ members are said to have refused to make payments for the contracted Paynet service fees in United States Dollars.
This resulted in BAZ suspending all banks operations with Paynet.
Paynet, a subsidiary of Payserv Africa, had contracts with banking institutions for the provision of electronic payment.
“Paynet requested payment of fees in United States Dollars (USD) when the country’s monetary policy made it mandatory for all local payments to be made in the local currency.
“This demand for USD payments, notwithstanding that the ZWL$ being the official currency, was the major bone of contention,” said CTC.
It added that Paynet had foreign obligations to settle in USD while banks could not pay in USD due to the announced policy.
The exchange rate was also fixed at the time with an ‘overvalued’ local currency making USD demands by Paynet very unreasonable from banks’ point of view, said CTC.
The commission then carried out investigations and noted that the conduct of collective refusal to deal is considered in most jurisdictions as per se prohibited collusive horizontal agreements.
It noted that refusal to deal can be a result of legitimate reasons including inter-alia non-payment, stocks shortage, disrupted supply, breach of contractual terms or commercial disputes.
“Any party, may on its own, refuse to do business with another party but concerted practices or an agreement or arrangement among competitors not to do business with suppliers or customers, may constitute illegal or anti-competitive group boycott especially where as a group of competitors collectively hold market power as is the case with the banks,” said CTC.
“After analysis, the commission made an order aimed at preventing anti-competitive coordination and concerted actions by banks operating under BAZ that the Bankers Association of Zimbabwe should forthwith cease and desist from coordinating activities of banks in respect of their selection and utilisation of electronic payment processing systems”.
The regulator added that economic actors who are competitors should make independent decisions necessary for upholding competition in markets.
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