Five companies issued with electronic money licences

Bank of Uganda has licensed five more companies to conduct digital and electronic payments under the new National Payment System law. 
The five join MTN and Airtel, which were separately issued with Payment Systems Operator and Payment Service Provider licences in May.

The National Payment System Act, implemented under the National Payment Systems Regulations, seeks to streamline operations of electronic operators. 
The five companies include issuers of payment instruments and trust fund operators. 

Ms Charity Mugumya, the Bank of Uganda director communications, yesterday told Daily Monitor that the five brings the number to seven of companies that have so far been licensed under the National Payment Systems Act. 
“As at October 20, the total number of companies we have licensed are seven in number and six others waiting to go through the evaluation processes,” she said, but did not provide details on those awaiting completion of the evaluation process. 
The five include Micropay Uganda, Mcash Uganda, Interswitch East Africa, Pegasus Technologies and Wave Transfer. 

Micropay, Mcash and Interswitch have been issues with licences for Payment Systems Operator and Payment Service Provider while Pegasus has been issued with a licence of Payment Systems Operator. Wave Transfer now has approval from Bank of Uganda to operate as a Payment Service Provider in the Regulatory Sandbox. 
All the above companies have been in operation but under different regulatory regimes. 
The National Payment Systems Act, which seeks to drive growth of e-payments and the cashless economy agenda effectively made it mandatory for all payment service providers to acquire new licences. 

Mr Peter Kawumi, the Interswitch country general manager, yesterday said the company now has an obligation to ensure that it aligns itself to the requirements of the National Financial Inclusion goals that seek to achieve digitisation of government and businesses as well as ensuring an increase in formal financial services in Uganda.
The licences, he said, as provides an opportunity to innovate and create new products that are responsive to the needs of the market. 

The financial technology space has been going through a lot of innovations, introducing products that had previously fallen under no particular regulation. 
For instance, mobile money had previously been regulated under Uganda Communications Commission but its regulation has since been shifted to Bank of Uganda under the National Payments Systems Act. 
The lack of regulation had created loopholes with companies innovating products, which expose user to cyber-attacks and such as other threats.