Debit cards dominating online payments, BoU data indicates
Online payments have been growing as Bank of Uganda pushes for attainment of a cashless economy. Photo | file
What you need to know:
Online payment systems, according to Bank of Uganda data, are dominated by debit cards, points of sale and credit cards, among others
Debit cards formed the largest share of digital payments in the three months to June, according to data from Bank of Uganda.
In details contained in the Quarterly Financial Stability Review released at the weekend, Bank of Uganda noted that the use of digital payment systems had continued to grow for both mobile money service providers and supervised financial institutions due to a favourable policy environment, evolving consumer behaviour and recovery in economic activity.
The review also reported substantial growth in internet and mobile banking fund transfers, which rose significantly by 98.9 percent and 164.5 percent, respectively.
No details were provided on the value of payments that were conducted through mobile money
However, the review noted that the value of mobile money transfers rose considerably by 37.6 percent to Shs155.99 trillion.
The review also indicated that the largest portion of digital payments were recorded through debit cards, which during the period, recorded a 22.01 percent growth in user numbers from 2.74 million during the same time last year to 3.34 million.
The review noted that 6.07 million payments were made through debit cards, representing a transaction value of Shs1.25 trillion.
However, this was a 19.5 percent decline from the Shs1.56 trillion that was paid through the same model last year.
Debit cards were followed by points of sale, which recorded a transaction value of Shs707.09b, obtained from 3.93 million payments that were recorded during the period.
Digital payments have been a key anchor on which government is seeking to attain a cashless economy.
However, payments through paper notes continue to dominate even as Bank of Uganda has previously indicated that digital payments are rapidly growing.
During the period, payments through credit cards also registered good growth even as the number of active users dropped by 13.42 percent.
Volume of payments conducted through credit cards increased to 265,817 from 168,879 in the same period last year, returning a combined value of Shs66.41b.
Bank of Uganda also noted that there was substantial growth among internet and mobile banking channels, which reported a 98.94 percent and 164.9 percent growth.
The report noted that in the three months to June, the value of funds transferred through internet banking stood at Shs77.56 trillion, while Shs6.33 trillion was transferred through mobile banking.
Mobile money recorded the largest transfers, which, during the period, grew by 37.58 percent from Shs113.38 trillion to Shs155.99 trillion.
Funds held in mobile money escrow accounts grew by 40.65 percent from Shs12.21 trillion to Shs17.17 trillion.
No disruption
Bank of Uganda also noted that Systemically Important Payment Systems, among which include Uganda National Interbank Settlement System, Central Securities Depository and Automated Clearing House operated without significant disruption during the quarter ended June.
