Banks Cut Off From Zimbabwe Payment Network Over Unpaid Bills

HARARE (Capital Markets in Africa) – Most banks across Zimbabwe are unable to process salaries and pensions after one of the country’s largest payment networks suspended its services for unpaid bills.

Cambria Africa Plc blocked bank customers on June 10 because its Payserv Africa unit is owed $470,000 for more than 4 million transactions since May 1, the Isle of Man-based investment company said in a statement on Wednesday. That was after it lost a collective $170,000 providing services over March and April.

The dispute between Zimbabwe’s lenders and Payserv is threatening to disrupt a country already grappling with foreign-exchange shortages, rampant inflation and mass unemployment. The National Social Security Authority said it may delay disbursements scheduled for Thursday as a result of services to banks being suspended.

“Not a single bank has taken concrete steps towards paying their outstanding May invoice,” Cambria said. “As and when such banks pay their invoice, they will be reinstated and their payments will be executed free of charge at any bank.”

Banks are disputing that they should pay Payserv in dollars, but that the company should accept payment in local currency, said Ralph Watungwa, the vice president of the Bankers Association of Zimbabwe and chief executive officer of Standard Chartered Plc’s local unit.

“As BAZ, we’re still discussing with them, but individual banks may have to make their own decisions,” he said. “We may have to resort to doing manual files like we used to do. There maybe delays here and there, but it’s still early days. We may have to find other service providers.”

Source: Bloomberg Business News