The Bank of Uganda has announced a split of mobile money into a stand-alone business, regulated as a financial service, a move aimed at separating the service away from telecom service operations, currently regulated by country’s communications commission [UCC].
In a statement issued by the country’s central Bank, the regulator said they had already issued licenses to Airtel money and MTN.
“Following the enactment of the National Payment Systems (NPS) Act, 2020 on 4th September 2020 and the gazetting of the NPS Implementing Regulations on 5th March 2021.” BOU
The country’s central bank has also commenced licensing of; Payment System Operators, Payment Service Provider and Issuers of Payment Instruments.
BoU has so far issued licenses to Airtel Mobile Commerce Uganda Limited and MTN Mobile Money Uganda Limited.
The bank also stated that M/s Wave Transfer Limited received their approval to operate under the Regulatory Sandbox Framework, according to Section 16 of the National Payment Systems Act, 2020 and Regulation 5 of the National Payment Systems (Sandbox) Regulations, 2021
The new guidelines also seek to ensure a streamlined regulatory regime of all financial-related operations and seek to support the deepening of the cashless economy, which the Central Bank had about four years ago said would be achieved by 2022.
However, even with the rapid growth in digital transactions, supported by mobile money and online banking, it will be difficult for the Central Bank to achieve a cashless economy over one year, given the high affinity to cash payments citizens.
Mr Peter Kawumi, the Financial Technology Service Providers Association of Uganda chairman, expressed optimism in the mobile money operations saying they are now properly regulated by a competent function under the Central Bank.
“The licensing of payment systems, will now open up investment opportunities and partnerships within and beyond the country and a clear growth trajectory. Previously, it has been difficult to regulate mobile money due to the absence of an enabling law.” Peter Kawumi