British-based digital payments service, WorldRemit has announced its removal of direct bank transfers to Zimbabwean accounts in favour of mostly cash transactions.
This came a month after Zimbabwe President WorldRemit announced new economic measures to make it more expensive to use foreign currency in favour of the local currency.
Among the government measures were an intermediate money transfer tax of 4% on all domestic foreign currency transfers and a cash withdrawal levy for amounts above US$1 000 of 2% from five cents.
The WorldRemit announcement will take effect on June 29, 2022.
“At WorldRemit, we pride ourselves on offering the best possible service to our customers. Sometimes that means removing services where we don’t believe we can provide the best-quality service or the widest range of options for you,” reads a letter from WorldRemit to clients.
“We have decided to remove bank transfers from our service in Zimbabwe. From June 29, 2022 you will not be able to send money to bank accounts in Zimbabwe.”
WorldRemit said it regretted removing bank transfers to the customers.
“We do apologise for any inconvenience this causes to you or your loved ones,” WorldRemit said. “The good news is that our other money transfers, including cash pickup, mobile money and airtime, will still be available. Have a look at our website and app for more information.”
WorldRemit’s action shows a current trend by British-based financial institutions of either partially or completely exiting Zimbabwe.
British-based global financial institutions, Barclays and Standard Chartered PLC announced exiting Zimbabwe in 2017 and 2022, respectively, with the latter announcing its intentions to do so in April.
The move by WorldRemit is set to hurt many clients as it is one of the major services used for diaspora remittances into Zimbabwe which is giving the country over US$2 billion in foreign currency earnings.
WorldRemit provides international money transfer and remittance services in more than 130 countries and over 70 currencies.
Putting higher levies and charges for using foreign currency compared to the local unit is the Treasury’s way of desperately trying to promote the use of the Zimbabwe dollar that continues to depreciate.
At the start of the year, the forex auction rate was $108,66 to the United States dollar, which has since depreciated to $338,49 to date.
Despite this, Finance minister Mthuli Ncube told Parliament on Wednesday that the Zimbabwe dollar would continue in use.
“Why do we not US dollarise? That is a very bad idea to only accept US dollars in our country. At the moment, you have a choice,” Ncube said.
“We have dual currency in the main and that is wonderful. If you decide you want to accept USD dollar only, obtain the US dollar. It is up to you and you have a choice to do that. That does not exist in other countries but we also want to make sure that our own ZWL is circulating and it is our accounting currency,” said Ncube.
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