The Bank of Uganda has issued an alert regarding the increasing use of mobile money platforms for online fraud and scams. These platforms have become targets for cybercrime, often perpetrated by individuals working in collusion with criminals.
To address this issue, the Bank of Uganda is taking steps to enhance security and reduce fraudulent activities in the digital financial services sector. In accordance with Section 55(1)b of the National Payments Systems Act, 2020, and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021, new requirements have been put in place for financial transactions involving Ugx. 1,000,000 or more.
Effective immediately, all transactions exceeding Ugx. 1,000,000 carried out at authorized agent locations and operator centers on digital financial service platforms must undergo identity verification. This verification process requires the presentation of a valid national ID for Ugandan citizens, a passport, refugee ID/attestation letter, or alien ID for foreigners.
Mobile money agents have been directed to enforce this requirement, ensuring that customers provide valid identification before conducting transactions exceeding Ugx. 1,000,000 on the platform. This measure is aimed at enhancing security and reducing the risk of fraudulent activities within the mobile money system.
While the directive aims to strengthen security measures, some users have expressed opposition to the new requirement. Rogers voiced concerns about the need for identification, stating his intention to withdraw just under the threshold to avoid providing ID. Similarly, Akenda Joshua predicted a decrease in mobile money transactions due to the inconvenience of carrying identification documents.
Another user questioned the effectiveness of the measure, referencing the existing requirement for SIM card registration and expressing frustration with government policies.
Despite the opposition, the Bank of Uganda maintains that identity verification is necessary to mitigate the risks associated with large mobile money transactions and to safeguard the integrity of the financial system.
According to the Deputy Governor, this directive reflects ongoing efforts to combat cybercrime and protect consumers in the digital financial services sector.
