Bank of Uganda on May 21 announced that it had issued licences to MTN and Airtel to operate mobile money subsidiary companies.
MTN will operate the mobile money segment under a new subsidiary MTN Mobile Money Uganda while Airtel will trade under Airtel Mobile Commerce Uganda.
The split follows the enactment of the National Payments Systems Act 2020 which places mobile money regulation under Bank of Uganda.
“Pursuant to Section 9 of the National Payment Systems Act, 2020 and Regulation 3 of the National Payment Systems Regulations, 2021, Bank of Uganda has issued licences to Airtel Mobile Commerce Uganda Limited and MTN Mobile Money Uganda Limited,” BoU said in a statement on Friday, May 21, 2021.
In addition, M/s Wave Transfer Limited received the Bank of Uganda’s approval to operate under the Regulatory Sandbox Framework, pursuant to Section 16 of the National Payment Systems Act, 2020 and Regulation 5 of the National Payment Systems (Sandbox) Regulations, 2021.
Ms Charity Mugumya, the Bank of Uganda director communications, says they are evaluating other licence applications, among which include UTL, Africel, Mcash, Micropay, Ezee Money and Interswitch, all of which have applied for both payment service provider and payment systems operator licences.
The development has drawn mixed reactions from several customers who fear that under the arrangement, there will be an increase in transaction costs.
But MTN says sought to calm the fears of Mobile Money agents and customers. Mr Stephen Mutana, the MTN head of mobile financial services, says the split of mobile money from telecom operations will not affect agent and customer operations in anyway.
Mr Denis Kakonge, the Airtel legal and regulatory director, says they are in the process of adopting to the new rules but also urged customers and agents not to be worried about the development.
According to the Uganda Communications Commission Market Performance report for the fourth quarter ended December 2020, Mobile money transactions have, for the first time crossed the one billion mark, surpassing the 954 million transactions that had been recorded in the 2020 third quarter. Agents remained the single most important point of interface in the last mile mobile money value chain, accounting for more than 25 per cent of total mobile money transactions in the period between October and December 2020.