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What BOU's new payment rules mean for telecoms

The Bank of Uganda recently issued payment services licenses to Airtel Mobile Commerce Uganda Limited and MTN Mobile money limited, in a move that is meant to further put in place a robust regulatory framework for the payments system.

The award of the licenses came barely two months after the gazetting of the National Payment System implementation regulations. In September 2020, the National Payment Systems (NPS) Act, 2020 was enacted to help bridge the gap that previous laws had left for payment systems across board to be regulated comprehensively. 

A statement by the governor of BOU, Emmanuel Tumusiime-Mutebile says the move is an indicator that the central bank has now commenced the licensing of payment systems operators, payment service providers and issuer of payment instruments as per the bank’s mandate going forward.

“The bank will continue to support the development of a vibrant and resilient payments ecosystem that promotes economic growth,” Mutebile said.

Airtel Mobile Commerce Uganda Limited, a recipient of Payment Service Provider (Class A) License and the Payment Systems Operator License (Electronic Money Systems) licenses will now conduct all Airtel Money services in Uganda while Airtel Uganda focuses on providing voice and data services to its customers.

Manoj Murali, the managing director of Airtel Uganda, said the licenses are a game-changer for mobile commerce in Uganda, and a big step towards making the institution bank-led.

“Now that we are a payments bank, we can now operate a savings platform with this license where customers can open the savings bank account and the opportunities are vast in Uganda with the large branch network and their financial facilities,” Murali said.

“This license also allows us to invest the funds of our customers. We will have trust banks and trustees with us who will take care of customers’ savings. We can actually invest this in government bonds and treasury bills,” Murali added.

Stephen Mutana, the head of mobile financial services at MTN, on the other hand, called the move by the central bank timely as it is one that will help to further streamline mobile money operations across all platforms, thereby easing its regulation.

“The guidance under the National Payment Systems Act or the law is that the mobile money component should be a stand-alone entity. The new entity that should be curved out of MTN Uganda limited is called MTN mobile money Uganda limited,” Mutana said.

He added: “This is a continuing operation we have reorganized ourselves into separate entities and we look forward to more innovation. Under this framework of the National Payment System, we expect more innovations in the market not only from us but also other actors.”

aaronorena@gmail.com

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