Innovation gamechanger

One of the fastest-growing sectors in Zimbabwe is financial technology, which has led to a rise in the number of applications and tools that improve international remittances. With remittances from overseas surging from US$1 billion in 2020 to US$2 billion in 2022, further innovations can be expected to lower costs, reduce risks and improve customers’ experience. Many home-grown solutions are expected as the Government, development partners and private sector companies work in unison with finance innovation hubs to accelerate the growth of a knowledge-based and tech-led economy. The Sunday Mail (SM)spoke to WorldRemit director (Anglophone Africa) Mr Darryl Pietersen (DP) on Zimbabwe’s technology and remittance trends.

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SM: What recent trends have you observed in Zimbabwe’s remittances sector?

DP: There has been a lot of recent transformation in the remittances industry, from technological advancements to increased partnerships between digital payment operators and financial institutions. However, due to economic challenges in Zimbabwe, the fast-paced dollarisation and preference for foreign notes by consumers, cash remains the country’s most significant remittance channel.

While other African countries can possess more than double the number of mobile money users than the number of bank accounts, in Zimbabwe, the number of active mobile money users is just 4,3 million, according to the Reserve Bank of Zimbabwe’s 2022 Monetary Policy Statement.

And yet, despite this, mobile money ascension continues. We have seen a level of choice where Zimbabweans use mobile money, as it offers more efficient and speedy transfers. Additionally, at WorldRemit, our partnership with financial institutions remains critical to the success of remittance payouts in Zimbabwe. Through these partnerships, we have increased service coverage, allowing withdrawal services that involve minimal travel and costs.

SM: In terms of innovation, which sub-sectors of remittance technology do you see as having the most growth in 2023?

DP: Data is a very important tool in the growth of any business sector, but its value is even greater in the financial world. We anticipate more growth in the number and quality of financial and remittance data handling and management tools. Security, too, is an extremely important consideration of the remittance business.

We anticipate more growth in technologies for securing transfers from the point of dispatch, through the various switches and interchanges, and on to the point of withdrawal.

Security innovations are especially important as the money transfer world is increasingly targeted by fraudsters.

In the next year and beyond, we expect to see more innovations on protecting remittance integrity. Both recipients and senders are expected to gain more capacity for managing their transfers through advancements in real-time tracking technologies. The increasing internet penetration (currently at 29 percent, supported by the easy accessibility of smartphones) is expected to drive the uptake of such capacities.

SM: Globally, remittances have contributed to the rise of new innovative businesses. Which lines of business do you see as gaining complementary growth in line with the transformation of the remittance sector?

DP:  The mobile money sector is one of the biggest areas of transformation in the remittance industry. At WorldRemit, we aim to create the most fluid and secure path for the flow of remittances from anywhere in the world to Zimbabwe.

We have invested heavily in technologies that improve our customer experience through diversified tools and products for both senders and recipients. Globally, we have created a number of special solutions, for instance, by allowing SMEs (small and medium enterprises) involved in international trade make payments to their employees and contractors across the globe, with the aim of saving their businesses time and money when making international payments.

Our partnerships with financial institutions have allowed us to penetrate the country in ways that were not possible before, and going forward, we know more growth will come from our vast payout networks such as our cash pick-up, airtime top-up and mobile money services. We are already seeing more value in investments that bring withdrawal services closer to the people, as more and more Zimbabweans gain access to the international money transfer options.

SM: A cost-of-living crisis is occurring globally. How do you envision this challenge will affect remittances to the country?

DP: It is true that, as a world, we are currently in troublesome times, which may not subside until later in 2023. However, as of December 31, 2022, ZEPZ users globally have sent over US$500 million to Zimbabwe.

We expect this trend to continue as Zimbabweans abroad continue supporting their families back home.