Old Mutual is going into mobile money and fintech. Can it disrupt Zimbabwe’s competitive digital payments space?

By Tonderai Maruke

It already dominates property in Zimbabwe, but now Old Mutual is moving to occupy a different kind of real estate – in the digital space.

Old Mutual, the country’s biggest insurance company and a dominant player in the financial sector, is launching a financial technology unit, Old Mutual Digital Services (OMDS). This subsidiary will provide mobile money services, insurtech, investech, digital lending, e-commerce, payments and digital products and services for the retail mass market.

CEO Samuel Matsekete says: “We are pleased to launch the fintech business, which we have designed to extend innovative integrated financial solutions and to promote financial inclusion, everywhere in Zimbabwe”.

Arthur Matsaudza will lead the new venture as its Managing Director. Before this post, he was executive in charge of digital platforms for Old Mutual Africa Regions and the group executive for Digital and Data in Zimbabwe. Gloria Zvaravanhu, currently Managing Director for the general insurance business, Old Mutual Insurance Company, will chair the board.

According to Matsaudza: “By providing innovative, digital-first solutions that reduce barriers to access and align with evolving market trends, OMDS will transform lives through affordable, flexible, and on-demand solutions provided via new distribution channels, leveraging strategic partnerships and driving financial inclusion and usage.”

Should it go all-out in these spaces, there will be strong competition for the likes of EcoCash and InnBucks, which are leading in the payments space. But, should these companies really be worried? What could Old Mutual bring that these two are not yet offering?

What the people want

For now, there are no details on what it is exactly Old Mutual is planning. However, the movement in the fintech space over the past five years shows us what the market wants. It is simple; people want a way to move money and to pay for goods and services as fast as possible, and for as little as possible.

The market will only notice if Old Mutual can build a payments platform that competes with EcoCash and InnBucks on price and coverage. The rest will be extra.

The economy is more informalised than ever before. Zimstat figures show that the biggest part of GDP is in trading, which employs most of the 88% who are informally employed. Any payments platform that manages to tap into what traders and small businesses want wins the day.

Old Mutual already has a toe in the digital space.

Last year, the company introduced CABS EezySend, a domestic remittance service which allows both CABS and non-CABS customers to send forex locally, using its wide branch network. Stepping up its involvement in money transfer, Old Mutual signed up over 600 merchants. Old Mutual’s digital platform, MyOldMutual, allows customers to pay premiums, renew insurance policies, review policy information, make insurance claims, process loan applications, buy retirement products, check rental balances, and pay rentals online. The trick with its new venture will be to sell this and more to a broader market.

The elephant in the fintech room

The one big risk to fintech remains known – it is the unpredictable regulatory environment. The Reserve Bank of Zimbabwe has proven that it is suspicious of new fintech technology, and its policies have always lagged behind the innovation.

We saw this with InnBucks. This was a loyalty service launched by Simbisa Brands to help customers deal with the old problem of small change in their fast-food outlets. Soon, it morphed into something more useful when it allowed people to transfer money. This is when RBZ got involved, shutting down InnBucks last April for doing this without the necessary licence. InnBucks returned four months later after a tie-up with a microfinance company.

For Old Mutual the art of success will be working around regulatory minefields, while finding out what Zimbabwe’s fast-changing market really wants. They have the clout for it, but so do their more experienced competitors.