O'mari, a relatively new player in Zimbabwe's mobile money sector, has recently announced the termination of its free transaction promotion. This change, scheduled to take effect from August 16, 2024, represents a significant pivot in the company's pricing strategy for its USD wallet services.
The development elicits mixed reactions. While the free transaction promotion offered much-needed relief to many Zimbabweans grappling with economic challenges, questions about its long-term sustainability were always present.
Under the new tariff structure, cash-ins remain free, but other services will now incur fees. Money transfers and bill or merchant payments will attract a 3.3% fee, inclusive of a 2% Intermediated Money Transfer Tax (IMTT) on amounts exceeding $5. Cash-outs will be subject to a 1.7% charge.
O'mari's Visa card services have also seen price adjustments. Users will now pay $5 for a new or replacement physical Visa card and $0.50 for a virtual card. Point-of-sale purchases and online payments will incur a 1.65% fee (minimum $1.50) plus the 2% IMTT, while ATM withdrawals will be charged at 2.5% with a minimum fee of $3.00.
Notably, transaction limits remain unchanged at $500 per transaction and $2,000 per month.
As Zimbabwe progresses towards a more digital economy, striking a balance between service sustainability and affordability remains crucial. O'mari's decision could potentially trigger a reassessment of pricing strategies across the market, possibly leading to broader changes in the mobile money landscape.
Interestingly, Innbucks has recently introduced a subscription-based model, which now appears more attractive compared to O'mari's new tariffs. It's worth noting that O'mari's new tariffs mirror those of EcoCash, the leading mobile money platform. A more competitive approach from O'mari, with tariffs lower than EcoCash, could have been beneficial for users.
The impact of the IMTT tax on mobile money tariffs has been significant, leading to calls for its removal. If the government heeds these calls, it could substantially reduce transaction costs and potentially reverse the trend of people reverting to cash payments.
As O'mari implements these changes, users will need to adapt. The company assures a smooth transition, with all registered users already having active USD wallets. However, the full impact on user behavior and the broader mobile money ecosystem in Zimbabwe remains to be seen.
Moving forward, it will be crucial to monitor how these changes affect financial inclusion and digital transaction volumes in the country. In Zimbabwe's ever-evolving mobile money landscape, change appears to be the only constant.
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