Econet denies role in agents conflict

Published: 06 March 2014

Econet Wireless Zimbabwe has distanced itself from an alleged row involving agents for its mobile money transfer, saying the company never had "exclusive contracts" with any of its dealers.

Telecel, which recently launched its own mobile cash system, Telecash, to rival that of Econet and NetOne, alleged that Econet's Ecocash agents were declining agency on its behalf saying they had been barred from doing so by Econet.

"Econet never took a move against agents to start with," a senior official told The Financial Gazette's Companies & Markets. "Econet's agreement with agents has never been exclusive."

Econet's spokesperson, Ranga Mberi, confirmed that Ecocash's contracts with its agents did not proscribe them from acting for other players. In a terse statement, Mberi said "We have never had exclusive contracts."

The Reserve Bank of Zimbabwe (RBZ) last week waded into the dispute, saying it had come to its attention "that some mobile payment system operators are entering into agreements with agents in terms of which the agent is precluded from acting for any other mobile payment system operator". The RBZ did not say who had informed it about the dispute, but suggestions are that it could have been one of the players.

Telecel Zimbabwe had lodged a complaint with the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) accusing Econet of refusing to share agents' services. Apparently Telecel is said to have been leveraging on EcoCash's already established agent network to establish its own mobile money product.

"The said exclusivity agreements or covenants are likely to have an adverse effect on competition and may be detrimental to the smooth operation of payment systems in the country. Exclusivity agreements will consequently hamper the Reserve Bank's efforts of promoting financial inclusion and the expansion of financial services in the economy," said the RBZ in a statement.

It said against that background, and to deal with anti-competitive agreements, it was directing payment system providers that their agents could offer services to multiple payment system providers provided that an agent had separate contracts for the provision of such services with each institution and the agent has the capacity to manage the transactions for the different payment system providers.

"Where an agent provides services for more than one payment system provider, such an agent may enter into a confidentiality agreement with each of the payment system providers for whom the agent will act," said the RBZ.

"Any payment system provider seeking to contract an agent which has already been contracted by another payment system provider to carry out agency services shall assess the capacity of the agent to manage transactions for different payment system providers."

"Where a payment system provider requires entering into exclusive arrangements with an agent, the payment system provider shall apply to the Reserve Bank justifying why such an agreement is necessary."

"The Reserve Bank shall consider such application and may approve or dismiss the application or may give an appropriate direction thereto."
- fingaz