Finance minister approves National Payment Policy
Minister of Finance, Planning and Economic Development Matia Kasaija has endorsed the National Payment Policy for Uganda which is expected to be signed into law by end of this year.
According to Bank of Uganda, payment systems in the country have significantly transformed, especially with the introduction of electronic money transfer platforms which have liberalized the financial sector.
However, according to the Central Bank, a plethora of safety and efficiency concerns have been raised regarding payment systems in Uganda thus the need for the National Payment Policy.
Some of the potential challenges the Central Bank highlights include fraud, system failures, consumer protection issues and lack of licensing criteria for those who intend to enter the payment systems arena among others.
All these factors affect the realization of a safe and efficient national payment system in Uganda, according to the Bank of Uganda (BoU).
The National Payment Systems policy, therefore, seeks to put in place a framework to facilitate the enactment of a Payment System law, specify the roles and responsibilities of all the payment systems stakeholders and ensure the safety of all payment systems in the country as well as foster consumer protection.
It also seeks to enable increased access to electronic payment systems to reduce cash-based payments and promote innovations.
Additionally, the National Payment Policy aims to promote the safety and efficiency of payment systems in Uganda, with a view to fostering financial sector stability and economic growth.
“The National Payment System (NPS) consists of the institutions, instruments, procedures, and technology used to facilitate the circulation of money within the country and internationally. The NPS is an essential part of the financial infrastructure and is by its nature dynamic and fast-changing,” says BoU.
“In particular, the use of electronic payment systems in Uganda has increased dramatically over the years, enabling more people to gain access to financial services. The ability to make payments easily and safely is important in ensuring the smooth and timely flow of goods and services throughout the economy. To that end, it is pertinent to ensure that payment systems operate in a secure and efficient manner.”
According to experts, a safe and efficient payment system helps to maintain financial stability by preventing or containing systemic risks.