Electronic Banking in A Sub-Dued Economic Environment. A Case of The Zimbabwean Economy (2013–2017)

The use of plastic money entails the effecting of business transactions without involving the physical exchange of hard cash or paper money but rather the wiring of money balances between the transacting parties. This trend has gained much popularity over the recent years in Zimbabwe owing to a subdued economic environment where hard cash is increasingly getting hard to come by. This paper sought to examine the effectiveness of electronic banking (e-banking) forms in easing the execution of business transactions without necessarily having to physically exchange cash. A quantitative research design was adopted to enable the researcher to establish the volume of transactions directly attributable to electronic banking and the relationship between availability of e-banking facilities and the volume of transactions effected and hence bank profitability. The study focused on the population of the banking institutions in Zimbabwe and drew a sample of three (3) of the leading banks in the adoption of e-banking, namely CABS, CBZ Bank and Steward Bank. The findings of the study were that: there is strong positive relationship between bank profitability and uptake of e-banking facilities, the number of transactions by bank clients increased tremendously, there was a lot of convenience on the part of clients as transaction could be executed anytime and anywhere, without necessarily having to visit the banking halls, the leading players were also providing point-of-services (pos) to other banks for a commission. However, there were logistical problems in the settlement of the transactions and the transfer of funds to the beneficiary accounts. In view of these challenges, it is therefore recommended that the financial institutions upgrade their systems and improve on networking to ease the business processes.