Shs13.6b held in 2.8m inactive mobile money accounts - BoU
According to details from Bank of Uganda, out of the 32.8 million mobile money subscribers, only 22.7 million were active during the three months to December 2021. PHOTO | FILE
What you need to know:
- In June last year, the Central Bank started implementing the National Payment Systems Guidelines, in which it licensed MTN Mobile Company and Airtel Mobile Commerce as the first companies authorised to conduct electronic money payments.
Inactive mobile money accounts dropped to 2.8 million for the period ended December 2021, according to data from Bank of Uganda.
The decline represents an 87.5 percent drop from the 5.25 million accounts that were recorded by the Central Bank during the period ended September.
Mobile money services are now regulated and licensed by Bank of Uganda under the National Payment Systems Act, which provides for licensing and streamlining of electronic payments.
The services had been previously regulated by Uganda Communications Commission.
Details from Bank of Uganda also indicate that during the period, the value of money held in inactive mobile money accounts had declined to Shs13.6b compared to Shs27.2b as of September 2021.
A mobile money account, according to Bank of Uganda, is considered inactive if it does not conduct any transaction in at least 90 consecutive days, after which it is declared dormant after going through different process.
Ms Charity Mugumya, the Bank of Uganda director communications, said the reduction in dormant mobile accounts was due to an ongoing clean-up by mobile money companies provided under the National Payment Systems Act, 2020.
During the period, the Central Bank also noted the number of registered mobile money subscribers stood at 32.8 million, of which 22.7 million were active.
“Customers are considered active if they transacted at least once in the preceding three months,” Ms Mugumya said.
However, the Central Bank did not provide details of which mobile money company shares the largest volume of dormant electronic accounts.
In June last year, the Central Bank started implementing the National Payment Systems Guidelines, in which it licensed MTN Mobile Company and Airtel Mobile Commerce as the first companies authorised to conduct electronic money payments.
The Central Bank has since licensed 14 companies as non-bank payment service providers and payment system operators.
As of March 2022, the Central Bank indicated that MTN Mobile Money, Airtel Mobile Commerce, Mcash, Micropay, Interswitch and Pegsus Technologies, were among some of the companies that had already been licensed under the National Payment Systems Act.
Others included Agent Banking Company, Wave Transfer, Chipper Technologies, Yo Uganda and Future Link Technologies.
What happens to money held in inactive mobile money accounts?
Under the National Payment Systems Act, after a mobile money account has been declared inactive, it is suspended.
The law requires mobile money companies, which are now stand alone businesses, to deactivate such an account and the holder is issued a month’s notice, within which he or she reactivates the account.
“At the expiry of the notice … the electronic money issuer shall block the electronic money account and shall not permit further transactions until the account is reactivated,” the National Payment Systems Act reads in part.
It further notes, that in the event of failure to reactivate the account within six months after it has been blocked, details of the subscriber and any balances thereon are sent to the Central Bank, which if not claimed within seven years, shall be sent to the Consolidated Fund.
