Government has been praised for passing the National Payment Systems Bill which is hoped to solve a number of financial risks.
The law which was passed in May this year, regulates payment systems and issuers of electronic money.
Experts in Financial Technologies (Fintechs) now believe the new law will enable them to have a balanced field for risk-free participation.
Speaking at a Fintech Symposium at Hotel Serena on Wednesday, Peter Kawumi, the chairman of Financial Technology Service Providers’ Association (FITSPA) said the law came at a good time where Financial service providers in Uganda needed protection.
“The potential to reach consumers at a large scale and accelerate financial inclusion in the country and abroad has improved economies and created more jobs. However, without adequate supervision and regulations, the rapid growth in the sector may lead to other risks such as money laundering, risks of data breaches due to inadequate security measures, there is also a risk of loss of consumer trust due to poor practices like non-pricing transparencies,” he said.
According to the Executive Director of Financial Deepening Uganda, Mr Rashmi Pillai, Fintechs are now being used by Ugandans every day and basing on statistics, 4 million Ugandans were financially included between 2013 to 2018.
Mackay Aomu, Director, National Payment Systems at Bank of Uganda noted that the regulations are important because they describe how payment service providers enter the payments space, their conduct and they also provide for an orderly audit.
Enid Edroma, General Manager, Corporate Affairs at Mobile Telephone Network (MTN) also welcomed Bank of Uganda’s move to put up regulations controlling Financial Payment System.
“We are pleased that Bank of Uganda has taken this approach and at the end of the day, the customer will be the beneficiary of this.
“MTN is required by the law to separate its fintech business from its general business. We have commenced this process. We have already started to see the benefits of having to separate the two. Our customers will get more clarity” said Edroma.
However, experts also asked Bank of Uganda and the government to find a way of regulating other big financial service providers like Google, Alibaba, Amazon, eBay etc which also offer digital services within the country.