What you need to know:
- Bank of Uganda has been pushing for a cashless economy and government has already indicated that it has phased out the use of cheques and cash in all its payment systems.
The ICT Ministry has said the high cost of mobile money, especially on withdrawals, is defeating the drive to digitise payments.
Speaking at the Digital Payments and Collections meeting organised by Standard Chartered Bank at the weekend, Dr Aminah Zawedde, the ICT permanent secretary, said that while mobile money has rapidly grown beside other digital payments, costs remain a threat to the drive to digitise payments.
“High withdrawal charges are affecting digitisation of payments,” she said, narrating that the ICT ministry recently contracted people to gather data for Parish Development Model, after which they were paid using mobile money but complained of high withdrawal charges that had eaten into their earnings.
Government is working together with the Digital Development Global Practice to build a foundation for inclusive digital transformation.
Technology has in the last 10 years provided a unique opportunity for countries to accelerate economic growth through digital technology.
Therefore, Dr Zawedde said, for any economy to digitally transform, the private sector must provide an inclusive digital financial system.
“If we want to transform into a cashless economy, we need to increase the rate of financial inclusion. We must bring everybody on board,” she said, noting that Fintechs, bank and regulators were at least now discussing how to accelerate digital payment systems.
Bank of Uganda has been pushing for a cashless economy and government has already indicated that it has phased out the use of cheques and cash in all its payment systems.
Beyond the high cost of transaction, Dr Zawedde said, the cost of digital enablers such as smartphones and the internet are still a challenge.
However, she said ICT had set up a five-year road map that will guide on the strategies that will be followed by government and the private sector to achieve digital transformation.
Mr Mackay Aomu, the Bank of Uganda director national payments system, said 26 payments system service providers have so far been licensed, while about 30 are being worked on, noting that the Central Bank had also called for bids to implement the National Switch, which is expected to create a convergence for all payment systems.