Central Bank raises sanctions on errant mobile money agents

The Bank of Uganda has said it could take legal action against mobile money operators who do not comply with the directive requiring them to require valid identification documents from people carrying out transactions of Sh1 million or more.

The directive was expected to come into effect on April 19, but a survey conducted on Monday by Nation Media Group – Uganda in Kampala found that the majority of mobile money agents are not enforcing it.

However, telecom giants MTN Uganda and Airtel Uganda have sent messages to their customers regarding the Central Bank directive.

The directive requires Ugandans to present national identity cards, while foreigners are expected to present their passports. Refugees are expected to present their identification cards or certification letters.

Andrew Kawere, deputy director of the National Payment Systems Department in the central bank’s finance directorate, said the directive is aimed at curbing cybercrimes that have compromised mobile money systems.

“Digital payments have increased significantly. Currently, sixty-four percent of Ugandans process payments digitally. Identification may seem like a big challenge, but it is good for the greater good of the financial sector,” he stated.

The directive is provided for in the National Payment Systems Act 2020 and, according to Kawere, the Bank of Uganda has held discussions with authorized mobile money operators.

“We understand that in the initial implementation there will be some friction, but there is a plan to move towards biometric verification in the medium term. This is being worked on between the Bank of Uganda and the mobile money operators,” he said.

David Birungi, public relations manager at Airtel Uganda, told NTV, a sister company of this publication, that the implementation process is underway.

“That’s a big change. “It requires implementing biometrics where we can and in other cases printing books where people leave their national identification numbers and sign, having identified themselves and showing their original national identity document,” he said.

“I wouldn’t expect this rollout to instantly cover everyone, but the journey is underway. We have distributed the books and we are complying,” he added.

For its part, MTN Uganda said they will work with agents to comply and implement the instructions to achieve the broader goals of security and financial inclusion for the nation.