itai zimunya

The idea is good. UPI is the most successful instant payments system in the world, and a single QR code would help small traders who cannot afford several POS machines. But technology is not our main problem. ZIPIT already allows instant bank transfers. Payments are expensive because of the 2% transfer tax, high bank charges and currency instability. UPI is cheap in India because the government ordered zero fees. New pipes will not fix a policy problem. Governor Mushayavanhu also refuses to guarantee lower charges, the deal must be concluded by 31 October, and we have not been told what it will cost or who will control our transaction data. The real test is whether a vendor in Mbare will pay less to receive money than she pays today? Until we get that answer, this is a promising idea without the details that matter. Since January the rate on ZiG transactions has been 1.5%, while payments made in foreign currency still attract the 2% levy. It is basically a revenue stream for the state. That is why many folks prefer cash transactions to avoid charges. The informal sector will remain formal industry's biggest competitor and threat as the article says because it trades in cash. Formal businesses pay the Intermediated Money Transfer Tax (IMTT) of 2% on US dollar transactions and 1.5% on ZiG transactions, as well as bank charges, and these costs are passed on to customers through higher prices. The informal trader pays none of these charges, so he can undercut the formal sector, and people naturally go where goods are cheaper. If the proposed idea doesn’t resolve this, then it is a merry go round fixing very little!