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Shs400b transacted through digital channels daily – BoU
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Mobile money has greatly boasted digital payments in the last 10 years. PHOTO | Edgar R Batte
What you need to know:
Digital transactions have been growing over time but, according to Bank of Uganda, have largely been limited to urban areas due to low financial literacy in rural Uganda
At least Shs400b is transacted through digital channels such as mobile money and internet banking, according to Bank of Uganda.
Speaking during the launch of the SafeBoda Super App, in Kampala, Mr Mackay Aomu, the Bank of Uganda director National Payment Systems, said volumes transacted through digital channels have been rapidly growing, with daily turnover now increasing to more than Shs400b.
However, he said, use of digital payments continue to be threatened by cyber-attackers, which as he noted, must be countered to make such channels safe in order to build confidence among users.
“We have to put in place systems to protect consumers. We are coming up with another regulation - Consumer Protection Regulation - to protect the public,” he said.
Under the new regulation, Mr Aomu said, service providers will be required to spell out what they much must, as a requisite, have a policy for consumer protection that ensures that cyber threats, even when they occur, are mitigated in a manner that is professional.
Cyber threats have been growing over time, threatening digital payments, which are some of the fastest growing sectors of Uganda’s economy.
In 2020, Uganda experienced a massive cyber-attack in which multiple companies lost billions of shillings to hackers.
It is estimated that close to Shs90b was siphoned through fake mobile money accounts created on the system with the help of telecom and payments aggregators.
Third party companies such as utility service providers, many of which receive bills payments through digital channels, were also affected.
However, even with such challenges, government has through, the National Payment Systems, been fast-tracking the achieving of a cashless economy.
Uganda is largely a cash economy, with at least more than 80 percent of payment done using cash.
A number of services providers have been promoting the usage of mobile money and credit and debit cards payment in the last five years.
Financial literacy
Mr Aomu also noted that whereas Bank of Uganda and a number of financial institutions have been conducting financial literacy, a number of Ugandans are failing to new innovations.
In 2013, Banks of Uganda launched a Strategy for financial literacy, which was a roadmap of actions and agreed steps by the public and private sector to achieve a set of defined objectives.