Zimbabwe's financial services sector is battling to contain a bitter fall-out between banks and Cambria.
Financial institutions in Zimbabwe - among them units of Standard Bank, Standard Chartered and Nedbank, among others - were left stranded after Paynet and Payserv withdrew services to process electronic funds and processing salary payments for employees and pensioners.
Cambria Africa said Zimbabwean banks had run up a tab for another $470000 since the beginning of May “knowing they would be charged in US dollars, yet deliberately continuing to use the system” while at the time “conspiring to replace us - by using other external” vendors. Banking sector executives said yesterday that they had made a decision and a presentation through the BAZ that the Cambria companies be paid in local currency.
Local finance institutions have been seeking measures to reduce exposure to foreign currency denominated costs. “The sector is limiting its exposure to foreign currency costs after the removal of foreign currencies such as the US dollar as transaction currencies as most of our income will now be in the Zimbabwe dollar. We made a presentation to this effect and sadly we could not come to terms of agreement, which is why we are having this issue of conflict,” said a finance manager with a commercial bank in Harare.
The Reserve Bank of Zimbabwe is, however, understood to have intervened and is brokering a settlement to the dispute. Sources in Zimbabwe's banking sector said the banks are digging in over their position that the service be paid for in local currency. The BAZ was yet to respond to the legal action.
Cambria said: “Payserv Africa and Paynet Zimbabwe continue to engage individually with suspended banks on the Paynet platform as well as the Reserve Bank of Zimbabwe to find a solution to an impasse which has resulted in the suspension of services.”
In June, payments for pensioners and salaries for other employees were delayed over the dispute, prompting local banks to try out alternative systems.
Paynet Zimbabwe has been partnering mobile money companies in Zimbabwe such as EcoCash and One Money to offer salary payment services through mobile money. Cambria also argued that the dispute was exposing the banking sector to risks through insecure funds transfer platforms such as manual spreadsheets sent by email and flash drives, in some instances.
Ralph Watungwa, an executive with the BAZ, had previously said that banks paid Paynet in US dollars, but argued that they now had to be paid in local currency after the current monetary policy changes, which stipulates that local service providers be paid in Zimbabwe dollars.