Parliament approves bill that will see Mobile money service providers licenced and regulated by Bank of Uganda.
Parliament has approved a bill that will see all mobile money service providers acquire working licences from Bank of Uganda (BoU) and submit details of mobile money users to the institution.
During Thursday’s Parliament sitting, the Finance Committee Chairman, Henry Musasizi said that the new law will not only allow for proper supervision and monitoring of all mobile money transactions but it will also provide better protection of user’s savings via any network.
Under the approved law – the National Payment Systems Bill, 2019 is predicted to provide a comprehensive payment system law but its absence in recent years has created limited regulation and oversight of payment systems and inadequate protection of payment and securities settlement systems.
Mr Musasizi told parliament that the absence of this comprehensive law created uncertainty in the market, especially on licensing of payment systems service providers more so those that fall out of the bracket of financial institutions.
As a result, Musasizi explained that the new law will help to address most of the regulatory gaps that have extremely affected mobile money users numerous times.
New law
Musasizi said the new law will now provide for electronic money issuance and circulation and how the issuance of mobile money will be licensed, supervised and regulated.
The new law will also provide for the protection of the payment and settlement systems against insolvency proceedings by providing for transfer orders finality and protection of collateral arrangements.
In addition, it will provide for the licensing criteria, procedure and the regulatory power of the Central Bank concerning the imposition of norms, standards on operators of payment systems and the powers to obtain information and take enforcement actions to ensure compliance.
Relatively, the law will require each mobile money service provider to acquire a licence from the Bank of Uganda and submit details of mobile money users to the institution.
Appropriately, it will provide details on how to deal with dormant accounts held with electronic money issuers where after 10 years, the funds on the dormant accounts will be transferred to the Consolidated Fund.
Meanwhile, any mobile money service provider or user who goes against the provisions of this Act of Parliament commits an offence and is liable on conviction, to a fine not exceeding 20 million Shillings.
Since the introduction in 2009, mobile money growth in Uganda has been flowing tremendously. It has smoothened financial transactions more so among the rural areas of the country.
With MTN and Airtel topping the chart of the biggest mobile money transaction networks, there are currently about seven mobile money schemes in Uganda including MTN, Airtel, Africell, M-cash, PayWay, Eeezy Money and Uganda Telecom.
