Harare – Business at tobacco auction floors has been grossly affected with the system being reported to be down since Wednesday. Payments are now taking more than 3 working days to reflect in farmers’ accounts as Paynet shuts out banks.
Paynet is a bulk payments electronic processing system offered to the market through Financial Institutions. The Paynet system is an outsourced payments transfer platform that offers clients an easy, secure and cost-effective method of sending payments instructions to their respective banks.
Institutions automate the messaging service thereby eliminating costs associated with manual and semi-automated payments processing and reconciliations in their back offices and that of participating entities.
The Paynet system is used for bulk multiple bank salary transfers, supplier payments and direct debits. With Paynet, business can process multiple payments easily.
However, Paynet which is a subsidiary of Cambria, listed in the UK, has shut off all banks in Zimbabwe from accessing and using its service as banks have rejected to pay for the service in foreign exchange given the entrenched forex crisis in the country.
This has caused mayhem in the banking sector with serious business disruptions across the economy. A few weeks ago Paynet gave notice to banks to pay for the service in US Dollars and the Bankers Association of Zimbabwe rejected, resulting in the current service disruption.
The banks and Paynet failed to agree as the banks felt that paying in US Dollars would be too pricey and it would result in them passing on the cost to their clients.
Paynet blocked banks two days ago and there is now chaos on the banking sector with payments not flowing. Payments are now taking longer to reach their final destination imposing an extra cost to both businesses and individuals.
Tobacco farmers, who are delivering their produce to various floors are the most affected as some had to wait for more than three days for their payments to reflect in their accounts.
Negotiations are however underway between Paynet and banks for a lasting solution on the issue.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.