E-payment instruments and welfare: The case of Zimbabwe

Journal for Transdisciplinary Research in Southern Africa

Field Value
Title E-payment instruments and welfare: The case of Zimbabwe
Creator Simatele, Munacinga
Subject — e-payments; welfare; financial inclusion; digital finance; Zimbabwe.
Description The literature shows that electronic payments are key to improving financial inclusion and achieving global development goals such as the United Nation’s (UNs) Sustainable Development Goals. The benefits are premised on the welfare-enhancing effects of digital payments, which reduce costs, the probability of loss and risk for low-income consumers, as well as improve access to formal financial services. This study thus investigates the conditions under which these welfare-enhancing gains can be obtained. It considers the conditions under which e-payments can be welfare enhancing by using qualitative data from Zimbabwe. The severe liquidity constraints in Zimbabwe provide a good case for evaluating how well e-payments work, as the relative absence of cash has made the use of mobile money inevitable. Focus group data are analysed to understand participants’ everyday experiences with the e-payment system in Zimbabwe. The results indicate that the key challenges with payment systems faced by households include high costs, malfunctions of the system at the point of sale, lengthy refund processes and limited acceptance. Participants indicate a strong preference for foreign exchange cash as a mode of payment. High levels of concentration in the mobile money market, lack of transparency by financial service providers and a strong preference for cash by retailers are the main drivers of system failure. Therefore, this study identifies the need for the government to address the lack of competition in the market, as well as address macroeconomic liquidity constraints.
Publisher AOSIS
Contributor University of Fort Hare, Nedbank Chair in Economics at the University of Fort Hare
Date 2021-01-20
Type info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion — Focus groups
Format text/html application/epub+zip text/xml application/pdf
Identifier 10.4102/td.v17i1.823
Source The Journal for Transdisciplinary Research in Southern Africa; Vol 17, No 1 (2021); 11 pages 2415-2005 1817-4434
Language eng
Relation https://td-sa.net/index.php/td/article/view/823/1576 https://td-sa.net/index.php/td/article/view/823/1575 https://td-sa.net/index.php/td/article/view/823/1577 https://td-sa.net/index.php/td/article/view/823/1574
Coverage — — —
Rights Copyright (c) 2021 Munacinga Simatele https://creativecommons.org/licenses/by/4.0