Mozambique: SIMO Rede failures causing “incalculable losses” – CTA | Watch

Login

Register

http://www.clubofmozambique.com/

Mozambique: SIMO Rede failures causing “incalculable losses” – CTA | Watch

9:03 CAT | 03 May 2024

Photo: CTA

The Confederation of Economic Associations (CTA) of Mozambique yesterday told a press conference that the failures of the new single electronic payments network [SIMO Rede] are causing “incalculable losses”, are a “reprocess” in the system and leading to informality in the economy.

“The instability of the transaction payment system is having negative and significant impacts on the economy and on the confidence of users of the national financial system. There is a lot of incalculable damage to the economy”, the chairman of CTA’s Information and Communication Technologies and Financial Services department Paulo Oliveira, told the press in Maputo.

At issue are failures in cash withdrawals and other transactions via ATM machines, payments for services or goods through POS machines, on the new platform of the Sociedade Interbancária de Moçambique (SIMO), which began to be implemented in 2023, a unique instrument adopted by the Mozambican central bank to operationalize electronic transactions.

Without specifying the amounts, Paulo Oliveira stated that these failures are causing “quite high losses, of thousands of meticais, and incalculable financial losses” to the economy, affecting sectors such as hotels, tourism and restaurants, causing a collapse in business and leading to ” unproductiveness” of the economy.

According to Miguel Jóia, speaking for CTA’s financial services department at the same press conference, in addition to creating “informality in the economy”, given the need for cash to be circulated to make payments – generated by the recurring failures of the system -, the problem undermines “all the progress that the central bank has been making in controlling inflation”.

The private sector understands that a “large magnitude” system change should be done carefully, to allow for comprehensive testing and subsequent large-scale operation.

“Platforms need testing and this cannot take more than a year. We have been having these problems for over a year, but these days constraints are mounting . If this system has not been tested, it must be removed and we must return to the previous one, while this one improves”, added the executive director of CTA, Eduardo Sengo.

“Given the seriousness of the situation, we are surprised by the silence of the regulatory body and other relevant entities of the national financial system (…). It is crucial that the Bank of Mozambique [central bank] addresses this problem with more urgency, identifying the real causes of the problem”, he added , in turn, Paulo Oliveira.

The CTA also said it expects the SIMO Rede to clarify the process of reversing money subtracted from users’ accounts in their respective payments or withdrawals, to ensure greater transparency and credibility to the system.

“SIMO Rede is obliged to have a service level of less than 30 days to make returns[payment reversals]. We are aware that there are requests that take longer than 90 or 120 days”, stated Joia.

The Bank of Mozambique announced in November that all commercial banks and electronic money institutions in the country had completed integration into the new single national electronic payments network, provided by Euronet, five years after a blackout on the previous platform.

The central bank said, at the time, that with the new platform, the Sociedade Interbancária de Moçambique (SIMO) was now “aligned with international standards for payment systems, which impose ‘contactless’ technology” for all bank cards and POS terminals, which “offers greater security and convenience for users”.

READ: Mozambique completes integration of banks into the single electronic payments network

Watch: Bank of Mozambique signs agreement with Euronet – AIM report

“SIMO Rede’s new platform has the advantage of offering a diverse range of products and services, with emphasis on interoperability (interconnection) between electronic money institutions, banks and other financial service providers”, the central bank also highlighted.

Watch.