ECOCASH agents have turned their booths into illegal selling points of cash at exorbitant premiums ranging from 30 to 40 percent.
For one to get bond coins and notes from EcoCash agents, he or she must transfer money into agent’s account with an additional fee ranging between 30 prcent and 40 percent.
For every cash-out transaction, the agents pocket an extra percentage, which they get in addition to the usual commission officially paid by Econet.
Ordinary citizens who genuinely require cash to pay for daily transport are forced to “buy” money at the booths that have since assumed a new role of illegally selling cash.
This is exacerbated by the unwarranted demand for cash payments by most retailers, who intend to resell it on the black market.
Most traders are rejecting EcoCash or swipe payments, putting pressure on the people to source the bond coins and notes through illegal means.
Section 14(1) of the Bank Use Promotion Act makes it unlawful to trade in cash without a licence.
“No person other than a financial institution or money lender shall exchange any negotiable instrument for cash at a premium …”
Econet Wireless is on record as warning its EcoCash agents against charging extra fees for cash-out services.
“Do not be caught charging customers extra to cash out. It is prohibited and attracts a penalty,” reads one of the warnings circulating on social media.
An investigation by The Herald revealed that most EcoCash agents have turned into illegal cash vendors.
So bad has become the situation that some kombi operators, retailers, wholesalers, ice cream vendors and other traders have set up illicit “cash wholesales” where vendors hoard cash at lower rates ranging between 10 to 20 percent for resale on higher rates.
The Herald monitored activities at the corner of Robert Mugabe Road and Leopold Takawira Street in Harare where a long winding queue of cash buyers is observed between 7am and 9am daily.
The dealer, who is an Ecocash agent, sells coins at the rate of 18 percent while bond notes are selling at 20 premium.
Vendors flock the agent for “wholesale rates” while commuters stampede the place during peak hour to buy cash to pay for kombis.
The illegal selling of cash has seen all the EcoCash outlets in and outside Harare charging exorbitant percentages to clients whenever a cash-out transaction is carried out.
Those who hoard cash at the “illegal cash wholesales” will then resell it at higher rates of between 30 percent and 40 percent.
An agent operating along Leopold Takawira Street said he buys cash from some undisclosed wholesalers in downtown Harare.
“Most people in the business sector do not bank their sales. They have found ready market for that cash. So we approach them and buy cash at reasonable rates. They usually charge us a 10 percent fee for coins and 15 percent fee for notes,” the agent said.
The agent said a mark-up is factored in with the coins being sold at the rate of 30 percent and notes selling between 35 percent and 40 percent.
“We then also charge 30 percent for cash-out in coins and 35 percent for bond notes. Some of the people who buy from us I believe will also put their percentage on top when they transact with their customers,” he said.
Another dealer at Market Square bus terminus in Harare, who preferred clients to cash out their money through his mobile number, and not EcoCash agent code, was demanding 35 percent for every transaction in bond notes and a 30 percent for coins.
He disclosed that he used to buy cash at a flat 20 percent from businesspeople operating close to the Mbare Flyover along Cameron Street before reselling at higher rates.
“I buy cash from a friend of mine with an EcoCash shop here in town. I understand he buys cash from some wholesalers in downtown and he dishes it out to us at a good rate. I then put a mark-up when reselling to others.”
Another agent at Chigovanyika Shopping Centre in Chitungwiza said a friend who operates a transport business offloads cash on her daily at reasonable rates.
“Commuter operators are my good sources of bond coins and notes. I have a friend who sells me cash daily at the rate of 18 percent.
“I buy from him daily late in the afternoon and resell it every morning at my booth,” she said.
Another cash vendor who was displaying bond coins and notes on a table in Mbare said she got her cash from shop owners.
“Most of us here do not even have bank accounts. We buy bond notes and coins from friends who run tuckshops here in Mbare.
“They strictly charge their goods in cash with a view to sell it to us for an additional fee. Tuckshop operators do not accept any form of payment other than cash,” she said.
She said some EcoCash agents got cash suppliers of up to $20 000 daily, which is illegally sold to desperate people.
An agent plying his trade along Albion Street said he was connected to bank tellers, who supplied him with cash daily.
“I get cash from my friend who works for a local bank. Towards the of the day I transfer my money from my Ecocash wallet to bank account and inform my friend of the transaction.
“He then facilitates that I get cash for the business,” he said.