FBC taps into the mobile money business

Author Name
Respect Gwenzi
Markets 10 months ago

Financial institution and investment holding company FBC Holdings Limited has launched a mobile merchant and bill payments option capping a year of solid market moving digital products release.

Since embarking on a digitisation program in 2018, the financial services group, has never been at its strongest than the current year. Earlier this year the bank went paperless, with automation of new accounts opening and several processes previously done manually or over the counter.

With the latest offering, onboarded customers can make payments without necessarily using their bank cards using digital avenues which include USSD Codes, Banking Apps and via a Whatsapp bot assistant. The product is essentially a mobile money service allowing for seamless mobile payments between customers and business as well as business to business, without the use of wallets.

“In simple terms, the new solution allows anyone with a bank account to make payments at churches (tithes), small to medium enterprises, vendors, tuck shops, barber shops, saloons, flea markets, among other merchants using a mobile device without the need to carry a physical ATM Card. Individual FBC Account and non-account holders are not required to register, as merchant and bill payment services are available on mobile banking platforms,” the company explained in a press release.

The product will give mobile money providers such as Ecocash, Onemoney and TeleCash , a run for their money. Typically, these other services require their subscribers to move money from their bank into a wallet which sits with the mobile money provider before moving it to their intended recipient.

A direct transfer from bank to merchants would typically reduce the costs and the effort required to complete the transaction. It waits to be seen what the costs structures of the service will be, but all else being equal costs of transacting would come down thus increasing the product’s edge to traditional providers of mobile money.

The company’s acting head of marketing, Roy Nyakunuwa said that the primary motivations for this move were to assist in the battle against COVID 19 while simultaneously making further strides in the digital direction.

“In the wake of the highly contagious coronavirus, handling banknotes, touching surfaces and not maintaining social distance amongst other factors increase the risk of Covid-19 transmission. Consequently, as a customer-obsessed and health conscious institution, we have seen it fit to offer a mobile payment platform as part of our digital transformation thrust and our quest to keep pace with global and local standards in the financial services sector.”

However, the underlying business and profit potential of the development cannot be overlooked.

In the year ended 29 February 2020, Mobile money and banking services done through Ecocash and Steward bank respectively made over ZWL$4 billion in revenue for Cassava Smartech, accounting for almost 90% of the group’s total revenue.

Although in the subsequent months profits were affected by some restrictions placed by government on mobile money operators to flag down inflation and the run-away exchange rate, the business remains profitable and under exploited.

Equity Axis News.

Stock Market ● 1 week ago
Room for FMCG ETF on ZSE

Since its January 4th debut on the ZSE this year, Old Mutual Limited's Exchange Traded Fund (ETF) has had an impressive run so far, presenting a good case for market interest in alternative financial investment instruments through formal & regulated channels. YTD price up 300% YTD market cap up 616% at ZWL 574.5m Broadly speaking, the ETF tracks and mirrors trading performance of the ZSE’s...

Stock Market ● 3 weeks ago
Cassava's trade suspension another thorn in ETF's side

Having violated ZSE listing requirements, shares of Cassava Smartech have been suspended from trading (effective October 1st 2021). The firm was due to publish its set of financial statements for the year-ended February 2021. Seven months later & no financials are out. Cassava’s market cap stood at ZWL 81.5 billion, with the firm well-positioned among the ZSE’s basket of “market heavies” – the To...

Stock Market ● 3 weeks ago
ZSE sustains record highs as magnitude subsides

The ZSE sustained record-breaking momentum in mid-week trades albeit at subsiding levels. The mainstream All Share Index surged by 1.97% in today’s session, a slow-down from an average daily gain of 3.7% over the past 5 days, to close at an all-time high of 8586.7 points. This is due to a -78% decline in demand as well as subsiding margins in market heavies and penny stocks respectively. On t...

Markets ● 3 weeks ago
Suppressed HY-21, Rosy Year-End Lined-Up For RTG

In the six-months ended June 2021, the Rainbow Tourism Group's occupancy closed the period at 24%, a 4% improvement from prior year levels. Inflation-adjusted revenue grew to ZWL 706m from ZWL 462m, representing a 53% growth. The Group says that in the face of business interruptions, gross margins managed to rise from 63% to 67% in the period. At ZWL 161m, EBITDA ended the half-year 6% down from...

Stock Market ● 3 weeks ago
Challenging the ZSE's "top performing stock market" narrative

After surpassing its own performance record (again), the ZWL-denominated exchange extended 2021 gains as the market’s counters continue facing economic uncertainties in the closing quarter of the year. Index up 198% YTD ZWL continues to depreciate Parallel market remains out of control Unlike steady-moving regional peers, the ZSE’s All Share Index (ASI) has nearly doubled its 2020 year-end...