Bank of Uganda



The Bank of Uganda (BoU) has warned local commercial banks, credit institutions and micro-finance deposit-taking institutions in the country to desist from levying of additional fees over and above the transaction charges agreed with different service providers of electronic payment cards.

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BoU on August 29, sent a warning circular to all the chief executive officers of the above mentioned categories of financial institutions where it banned merchant surcharge and the fixing of minimum/maximum transaction amounts on electronic payment cards. The ban was effective September 15, 2019.

“In practice, some merchants add a surcharge to transactions and…or establish minimum or maximum transaction amounts as a condition for accepting electronic payment card methods. Bank of Uganda regards this practice of merchants surcharging and establishing minimum/maximum transaction amounts on electronic card payments as unfair and unjustifiable businesses practices that are detrimental to the growth of electronic payments in Uganda,” said Hannington Wasswa, Ag, Executive Director Supervision

Wasswa says the practices discourage usage of electronic card payment system and negatively impact the consumer’s perception of such methods of effecting payments. This undermines the national efforts by the Government of Uganda to promote non-cash payments and financial inclusion.

“Merchant surcharges at Point of Sale (POS) terminals and Automated Teller Machines (ATMs) is prohibited. Establishment of minimum/maximum transaction amount, as a condition to accept electronic card payments is prohibited,” he warned.

He says supervised financial institutions connected to card payment switches where there exists a local/domestic or in-country settlement framework must endevour to have in place a harmonized or uniform domestic charge or tariff structure across all interoperable ATMs.

He says the registry to capture information on errant merchants for breaching the directives will be established where errant banks can be reported.