How Does An EcoCash Outage Affect Local Startups?

Farai Mudzingwa Avatar

What started out as an EcoCash system upgrade this past weekend quickly turned into the equivalent of a horror show for many local businesses which simply couldn’t process transactions on the most widespread payment platform in the country.

We wondered just how impactful this disruption was and reached out to a number of startups to enquire on how much potential revenue they lost out on due to EcoCash’s downtime:

Of the startups, we reached out to Fresh In A Box was the biggest loser, losing out on 160 sales worth ZW$77 930 in total. They tracked these potential sales through Longrocket which also allows them to monitor the last stage of a customers transaction.

Thumeza a Bulawayo-based logistics startup lost $2 000 this week and the Founder and CEO – Gugulethu Siso stressed how much of a hold EcoCash has a hold on the market especially the unbanked.

Other startups did not disclose an exact figure of how much they lost but Mobisoft development team behind some of the most popular local apps like EcoLedger lost out on 25% of expected revenue during the time the mobile money platform was down.

Housing Hub the accommodation startup said they anticipated this would be one of the busiest weeks of the year with the MSU graduation coming. However, they missed out on some orders and had to use roundabout methods to complete transactions with customers who were patient enough:

This has brought business to a standstill. Each time we have to request for an EcoCash account statement to verify transactions because our merchants aren’t reflecting notifications to prove that people have sent money.

We have to request these statements every 30 minutes to verify payments before we can accept anyone.

Marvellous Nyongoro – CEO & Founder of The Housing Hub

Requesting EcoCash statements comes at a cost. Not only did the Housing Hub lose potential revenue from customers who couldn’t convert, but they also had lower margins on the customers that did…

There are a few startups who we talked to who confirmed that they didn’t really feel scathed by this outage and it seems those are not entirely dependant on EcoCash. Musungo who complete most transactions with a cash-on-collection model said around 90% of their orders are fulfilled in cash and thus they haven’t really been affected by the EcoCash outage. In fact, they said things like internet instability affect them far more than the recent crisis.

Animation Studio Alula also has a similar perspective to Musungo and it seems for businesses that can avoid EcoCash (very few of them exist) or don’t primarily rely on it there wasn’t much of a discernible impact.

One metric that might be harder to measure is the momentum and potential growth that startups, in general, have missed out on during the downtime. Most startups rely on EcoCash to make money and when the service is down for 4-5 days businesses are losing out on new and old customers who could’ve increased revenue.

Post-crisis, it will be interesting to see if startups/businesses and Zimbos start looking for alternatives to EcoCash in order to protect themselves from such an incident or if the hassle of moving to a different service will mean the mobile money market share continues to be monopolised by one player…

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What’s your take?

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  1. Interest

    Difficult to assess… What really is shocking is the zipit platform did not take advantage or one money…I think they have lost the most money.. Lol

  2. Kruzhnev Brezhnev

    Econet are very incompetent, and this is solely because they know they have no close competition. It is a big inconvenience especially considering that there are places where econet network is not easily accessible, therefore people travel to bigger business centers to access their mobile money usage, hence there is transport costs incurred, in the wake of hard being scarce. Econet should stop thinking that only the people in Urban areas are the ones using their services it. It’s pathetic