Company Announcements

Suspension of Banks on Paynet Zimbabwe Platform

Source: RNS
RNS Number : 9983B
Cambria Africa PLC
12 June 2019

Cambria Africa Plc


("Cambria" or "the Company")


Suspension of Banks on Paynet Zimbabwe Platform


Further to the announcement earlier today, Paynet's service to all its bank customers in Zimbabwe was suspended after close of business on 10 June due to a collective refusal to pay historical and contracted pricing to Payserv Africa in US dollars.


The Company lost US $170,000 providing services to banks in March and April 2019. Banks collectively owe Payserv Africa over US $470,000 for over 4 million transactions concluded since 1 May 2019. The Company cannot allow further accumulation of possible losses. The Company estimates that in 2018 banks netted $5 in profit for each dollar invoiced to them. Collectively in 2018 banks netted over US $22 million in profits via charges to its account holders for services provided by Paynet.


Despite this highly profitable relationship with Paynet, banks have stonewalled the Company's attempt to maintain the US dollar value of its services following the devaluation of the currency to 5.86:1 USD on the interbank market. 


The following events made the decision by the Company to suspend its service to all banks necessary and urgent:


1.    Banks, including Stanbic Zimbabwe (a subsidiary of Standard Bank South Africa) and the Industrial Development Bank of Zimbabwe (IDBZ) recanted written commitments made prior to 31 May to honour Payserv Africa's invoices Representatives of these banks claimed they will await an "industry position" from the Interbank Operations Committee ("IOC"). 

2.    Four days to the deadline for receipt of payment, the Company has not received a single indication, even verbal, that payment has been initiated, or approvals were being sought, or in short, a sign from a single bank that they intend to pay. In the meantime, the banks collectively have run up a bill to Payserv Africa of over US $420,000 for the period 1 May to 10 June 2019.

3.  Rather than engage directly with Payserv, the banks chose to speak through the IOC which committed its members, and perplexingly their superiors, to respond to Payserv with "one voice"- silence. Despite the fact that this is a commercial issue not an operations issue, rather than engage with us directly, banks abdicated their commercial interest to the IOC.  The IOC was effectively turned into an unregulated monopsony controlling the purchase of Paynet services. To quote FBC's treasurer, "The interbank operations coordinated and led the discussions." 

4.    On 31 May 2019 the Reserve Bank of Zimbabwe (RBZ) Governor, Dr John P. Mangudya.  endorsed the assignment of Paynet Receivables and he committed that Exchange Control would instruct banks that the RBZ would not object to payment of Payserv Africa invoices. Payserv communicated this to all invoiced customers and agreed to provide a grace period of two weeks for receipt of payment.  However, ten days later it is clear that the intention was to run out the clock and use the time against Payserv while attempting to present untested and unapproved alternative software platforms.

5.  CBZ, Standard Chartered, CABS, and Nedbank, among others, had claimed that they would be prohibited from paying an external invoice by the RBZ.  Yet when definitively informed on 31 May that this prohibition has been removed, they did not engage with Payserv.

6.  Despite prior receipt of communication confirming the RBZ's position and the extension of the deadline, on 31 May Standard Chartered Zimbabwe wrote to its customers to use its Straight2Bank or S2B service as an alternative to Paynet. 

7.   Just prior to suspension of services, on 10 June 2019, CABS (Central African Building Society), a subsidiary of Old Mutual, informed its customers that Paynet will be disconnected and suggested the use of the bank's Direct Inject system.  

8.  By publicly anticipating disconnection, both Standard Chartered and CABS indicated in the Company's view their refusal to pay Payserv's invoices. At present neither bank's service is capable of carrying interbank batch instructions and settlement information.


It was clear that the above events had overtaken Paynet's commitment to the RBZ's Governor to suspend banks in the event of non-receipt of payment by 15 June. Whether in deference to the IOC or by their own accord, not a single bank has taken concrete steps towards paying their outstanding May invoice. As and when such banks pay their invoice, they will be reinstated and their payments will be executed free of charge at any bank.





That the IOC refused to meaningfully engage with Payserv Africa knowing with certainty that banks not paying would be suspended, begs in the Company's view one or more of the following conclusions:


1.    As a group the IOC felt such disruption would be tolerated by bank customers.

2.  That they could find alternatives or promote alternative services to Paynet, notwithstanding approval, testing, security, stability, or reconcilability of such alternatives. 

3.   Payserv would reverse its position and accept a Zimbabwe local currency (RTGS) for its May invoice, effectively charging US 2.6 cents per transaction at interbank exchange rates instead of the contracted average of US 16 cents

4.    That Payserv would not risk following through on suspending customers who don't pay.


In the Company's opinion, this exonerates Payserv from responsibility for any disruption caused by the suspensions, and places the blame squarely on the IOC and those that believed in the strategy which ensued.


It would be patently irresponsible for Payserv to continue providing a service without payment or to accept 20 cents on the dollar assuming access to the interbank market. Alternatively, Payserv would have to at a level predict devaluation and market access for which Payserv has no mechanism, especially given the 30-day notice period for a price change in our contracts.  We note again that we have not proposed a price change.


Payserv, at the best of times, has had intermittent access to the interbank market, hence the overhang of parity debt. 


By definition, banks have greater access to the interbank market. Banks in Zimbabwe pay externally for a multitude of foreign owned technologies in foreign currency - sometimes to their own holding companies. This includes core banking software, database software, Microsoft and server software which they fund from bank charges and fees on foreign currency based accounts. It is illogical to accept that banks can pay for such subscriptions, licenses, and service but cannot pay Payserv Africa.


It seems strange that given their access to currency, banks cannot price Paynet's services, which have been handsomely profitable to them, and allow 5,000 installations to choose between "alternatives". After all, their account holder is the one paying for the service. Whatever the motivation, it cannot be in the interest of the consumer nor the bank to actively eliminate Paynet.  However, we have to accept that the situation can provide the excuse to reward a particular competitor or punish Payserv's audacity to insist on protecting its profitability.


The worst possible case for Paynet is for its service to be replaced by a robust and immediately available alternative.  Such an alternative would in the Company's view neither be cheap nor immediately available and customizable. The 5,000+ corporate users of Paynet would find it difficult to switch to a new system, however robust. A new system would require the kind of customization that Paynet has provided to each bank at a far lower cost than would be charged by their core system providers. While rationally speaking we should never have reached the stage where banks would want to see who blinks first, here we are and none of this is rational.  Particularly when Payserv publicly committed US $1 million to develop new technologies for the industry which seems to be shunning it now.


We can only hope sanity will prevail and banks will reengage with us as partners instead of pursuing a group strategy of beggaring their supplier. If it doesn't, we believe in the long term Cambria's resources and prospects are sufficient to redirect its focus and regain any profitability lost to recalcitrant banks.






Cambria Africa Plc:

Samir Shasha

+44 (0) 207 669 0115





WH Ireland Limited:

James Joyce / Matthew Chan

+44 (0) 207 220 1666



This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit