Zimbabwe: Bid to resuscitate use of international credit cards falters

Banking sector sources said no banks had installed Processing Data Quickly Machines (PDQMs) for processing international credit cards in Zimbabwe, despite appeals by the central bank for them to do so.

The Reserve Bank of Zimbabwe governor, Gideon Gono launched the bid to resuscitate the use of international credit cards in January, saying the country had lost large amounts of foreign currency due to the suspension of the service to foreign visitors.

Gono said some tourists were crossing into neighbouring countries in order to utilise their credit cards, as well as services in those countries, depriving Zimbabwe of much-needed foreign currency.

He indicated that he had instructed all banks authorised to deal in foreign currency “to install or reinstall PGQMs” to facilitate use of credit cards by international visitors, saying those that needed foreign currency to do so would have their foreign currency applications favourably considered.

But a banker said there was no market for use of the facilities in Zimbabwe due to the scarcity of Zimbabwe dollars, which has triggered a limit in the amount, individuals and corporate institutions could withdraw through tellers and ATMs.

The maximum cash withdrawal is currently pegged at Z$100bn per day; hardly enough to buy a pint of fresh milk currently retailing at Z$150 per packet.

The unattractive official exchange rate means visitors transacting using international credit cards in Zimbabwe would buy goods at a premium, making use of the facility, unattractive.

Banks were, therefore, unwilling to pick up costs of re-establishing the facilities because they would serve no purpose.

Although Visa Card are issued locally by the British-owned Standard Chartered Bank and Barclays Bank and South Africa's Standard Bank group-owned Stanbic Bank and domestically owned NMB Bank, these cannot be used outside the country because of foreign currency constraints.

However, these banks have started issuing foreign currency account-linked Visa Cards to allow holders of foreign currency to transact abroad using the cards.

Retail outlets, which used to accept such international cards like MasterCard, Diners, Maestro and American Express, have stopped accepting them because they are not supported by local banks.