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99% of motor third party paid using mobile money
Payments for motor third party insurance are now mostly conducted through mobile money. PHOTO | FILE
What you need to know:
- Of the Shs16.5b collected in premium since July, more than 99 per cent (Shs16.4b) was through mobile money, while only Shs39m was drawn from banks, according to data from Insurance Regulatory Authority.
Telecoms enabled payment of at least Shs16.4b for Motor Third Party between July 2020 and March, according to data from Insurance Regulatory Authority (IRA) Motor Third Party, which is a statutory insurance payment for motorists, has in the past presented challenges in terms of collection after the anti-fraud unit of IRA discovered forged stickers among motorists.
Data from IRA indicates that mobile money was the most preferred mode of payment for Motor Third Party insurance during the period under review.
Of the Shs16.5b collected in premium payments since July, more than 99 per cent (Shs16.4b) was through mobile money while only Shs39m paid in banks.
Ms Mariam Nalunkuuma, the IRA spokesperson, said yesterday the growth had been a because of the convenience and instant nature of mobile money.
“Mobile money is an instantaneous and convenient service which can be utilised … with no need to line up anywhere,” she said.
Impact
Mr Samuel Muhereza, a corporate worker in Kampala, told Daily Monitor he had first used the service through his MTN mobile money account in July after it had been launched.
“It was quick and convenient. I was not a in rush to pick the sticker because I had paid. I only picked it on my way home,” he said.
Ms Nalunkuuma said mobile money payments have been instrumental in curbing market fraud, noting forgery of stickers and cheating of customers had substantially reduced.
“Previously, one would pay more premium than required but the system now has that information pre-generated,” she said, adding that undercutting has been reduced because of predetermined pricing in the system.
Undercutting is used by players to drive out competition through setting low product prices.
Covid-19 spurs online payments
Prior to the introduction of the platform, motorists were required to visit stalls of motor third party selling agents to make the insurance payment.
This method was hugely affected by the onset of Covid-19, which occasioned a lockdown thus limiting movement of people around the country.
Consequently, the motor third party a mobile payment platform was a timely innovation as it limits movement and eliminates exchange of cash.
Effective collection of motor third party insurance, which houses a tax component to Uganda Revenue Authority ensures government revenue is collected towards better service delivery.
