EcoCash Shows the Inherent Risks of Mobile Money
A two-day crash of EcoCash, the largest financial transaction platform in Zimbabwe, has shown the inherent risks of digital money. That is typical of technology: everything is fine but when a problem arises, you would wish you never used it. Think of your phone not powering up and phone contacts you have built over 5 years trapped and lost. In Zimbabwe, people could not access their monies for two days because "technology failed". Of course, the EcoCash technology is to be blamed here. A redundancy in the system could have fixed that problem.
The disruption of such a dominant financial platform has raised serious questions in Zimbabwe about about the inherent vulnerabilities of mobile money, especially given the dominance of one mobile wallet over others. Like with big digital platforms such as social media or content providers, a so-called “network effect” tends to give the leading mobile money provider additional advantages and efficiencies over rivals, making them only stronger. This has been seen with the success of Safaricom’s M-Pesa mobile money platform in Kenya where it has over 80% market share.
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