Deputy Governor, Dr Michael Atingo-Ego

Bank of Uganda (BoU) has revealed that the value of payments by mobile banking, debit cards, mobile money, and internet banking shot up by 84.4%, 75.6%, 43.1%, and 31.8%, respectively, from September 2020 to September 2021.

The revelation was made by the Deputy Governor Michael Atingi-Ego at the launch of Centenary Bank’s platinum MasterCard debit card.

The havoc wrecked by the Covid-19 pandemic has accelerated digitalization and the use of digital money. The pandemic has reinforced the trend of cashless payments. Internet shopping has become more popular and contactless payments by card or mobile phones have picked up significantly.

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“The spike in the usage of digital financial and payment services during the pandemic has been astounding,” Atingi-Ego said adding that, “Card and contactless payments are popular for obvious and subtle reasons. They are cleaner than using cash, cheaper than wire transfers, quicker than using cheques, and, obviously, not as risky as sending cash via the post office or on a bus.”

He said MasterCard is good for Centenary Bank because it spends less on cash handling and processing. With the Platinum debit card, Centenary Bank will also enrich its value proposition to esteemed clients through value-added services, hence building loyalty. Much as the card might not have a universal appeal, it shows increasing confidence in the power of digitalization for service delivery by an otherwise conservative bank.

“A distinguishing feature of Centenary Bank is its strategic focus on unlocking the power of financial services for the underserved in rural areas. It is a noble cause to focus on the financial inclusion of those at the bottom of the pyramid, not least because 39 percent of Ugandan households remain stuck in subsistence production outside the money economy. Still, I would like to challenge Centenary Bank to do more.”

The experience of mobile money in East Africa has proved that digital technology is a firm lever for financial inclusion. Technology offers means to improve access to financing for households as well as small and medium-sized enterprises. Using digitalization, Centenary Bank can go beyond reaching the rural and underserved to transform their access to financial services by discreetly leveraging their digital payment data to overcome their lack of collateral.

“It is critical to enhancing risk management frameworks to contain the risks that are inherent to digital financial and payment services, such as cyberattacks, outages, technical glitches, fraud, and faulty algorithms,” he said.

He said BoU will continue to support the digitalization of financial services and e-Payments with the associated risk management, as well as advocating for lower and comparable costs.