Log in
Updated seconds ago

BoU prohibits extra charges imposed on e-payments

Bank of Uganda has asked businesses that accept electronic card payments to stop charging customers extra fees or surcharge other than that agreed upon with service provider of the given payment card.

BoU also says no business owner is allowed to set a minimum or maximum amount as a condition to use electronic card payments. The directive took effect from September 15, 2019. The circular, signed by Hannington Wasswa, the acting executive director for supervision, was issued on August 29, 2019.

“In practice, some merchants add a surcharge to transactions and/or establish minimum or maximum transaction amounts as a condition for accepting electronic card payments,” BoU says.

It adds: “[This is] unfair and unjustifiable business practices that are detrimental to the growth of electronic payments in Uganda.” 

A growing number of businesses, including restaurants, bars, and shops in Uganda accept electronic card payments by debit or credit cards. However, an extra charge – which is outside the normal fees one pays for using the service - makes this mode of payments very expensive.

This has meant that more people prefer to carry cash instead of cards to avoid these charges, crippling the grow of e-payments in the country. Most payments in Uganda are still done through cash but government wants to move away from this to a more secure card-based payment system. Carrying cash comes with a risk of being robbed. 

It costs at least between Shs 6,000 and Shs 10,000 to transact using a card. Some businesses add a charge on those fees, pushing the cost to the highs of Shs 20,000 or more for a payment of just Shs 1 million.


0 #1 julio 2019-09-21 23:37
This was long overdue..apart from Uganda where corruption is institutionalized, no were in the world is a charge on using electronic cards.

Indeed govt should transform the financial sector to a non cash based economy for valid reasons like robberies and ease of transactions.
Report to administrator

Comments are now closed for this entry