eBusiness Weekly
Golden Sibanda
Paynet, the former provider of bulk payments technology to Zimbabwe banks, blames the BAZ for the ending of its business.
PAYNET Zimbabwe, which facilitated bulk payments for local banks until the recent impasse, has filed a US$100 million claim against Bankers Association of Zimbabwe (BAZ) for anticompetitive practices that cost it contracts with local banks.
The company, which provided an outsourced bulk payments technology platform before the payment dispute over currencies caused banks to switch to other systems, accuses BAZ of influencing its members to refuse to settle invoices or pay service fees in US dollars, following currency changes in February, violating contractual agreements. Paynet’s outsourced bulk payments platform linked 22 Zimbabwean financial institutions and over 1 200 corporates across all sectors of the domestic economy, for 20 years.
Together with its Mauritius registered parent company, Payserv Africa, Paynet this week filed summons at the High Court under case number 6071/19 and cited the BAZ as the only respondent.
According the record of file, Paynet said it had separate contracts with banks, which were denominated in United States dollars, alleges that all the banks took a collective decision to refuse payment in the currency at the instruction of the BAZ.
“Defendant engaged in anti-competitive practices, actively preventing its members from free and constructive engagement with the plaintiffs. The defendant was effectively instructing its members to breach their respective contracts and existing arrangements with the plaintiff.
“Plaintiffs deem the defendant’s conduct to be deliberately anti-competitive and destructive to the conduct and profitability of its business and its ability to freely and individually negotiate with members of the defendant,” the plaintiff submitted.
It claims as a result of BAZ’s actions, all contracted financial institutions could not to fulfil their obligations as requested or initially agreed and even endorsed by the Reserve Bank.
“Defendant’s actions were clearly calculated to eliminate the Paynet platform as a service provider to all its members, regardless of the particular financial institution’s intentions, preference or competitive interest,” Paynet Zimbabwe argued.
The company said since the technology was outsourced from Payserve, it was obliged to remit licence fee proceeds to the owners of the platform, which is Payserve Africa.
Trouble started when Paynet wrote to banks on April 24 saying that from May 30, it would invoice and collect agreed licence fees in US dollars instead of local currency.
Paynet claims that between February, when the Reserve Bank directed that all electronic balances be converted to RTGS dollars, and April, it got paid in the local currency.
The company said within that period banks accumulated invoices of US$430 000 while it incurred foreign exchange losses of nearly US$200 000 being paid in RTGS dollars.
On May 15, Paynet said it wrote to the banks and attached the invoices, which was payable May 31, 2019, which were to be settled in United States dollars as advised earlier.
It also claims follow up communication was made reminding the banks of the requirement to state their acceptance to its demands, failure of which would result in suspension from the payment service platform.
“A number of financial institutions indicated in writing that they accepted the invoice and intended to pay,” Paynet said.
A meeting was reportedly held with the central bank Governor, Dr John Mangudya, in the presence of financial markets deputy director Farai Masendu, at which the governor indicated the bank had no objections to payments in US dollars.
But despite Paynet, the firm claimed writing and advising banks that the central bank did not object to the company being paid in US dollars, BAZ allegedly engaged in anti-competitive practice by writing to its members instructing them not to engage with Paynet.
BAZ could not be reached yesterday to confirm receipt of the sermons or not.
