Bank of Uganda (BoU) has directed telecom companies offering mobile money services to ensure that their agents start demanding a valid identity card before a customer transacts more than Shs1m on the platform.
Andrew Elwana, the acting director of communications at BoU, says the directive, which takes immediate effect, aims to stem the rising fraud cases in mobile money transactions.
“Therefore, in compliance with Section 55(1)b of the National Payments Systems Act, 2020 and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021, all financial transactions involving Shs1m or more that are carried out at authorised agent locations and operator centres on digital financial service platforms must be completed after the holder’s identity has been verified using a valid national ID (for Ugandans), passport, refugee ID/attestation letter, or alien ID (for foreigners),” Mr Elwana said.
Airtel Uganda Public Relations Officer David Birungi confirmed receipt of the BoU directive, saying as a company, they welcome it and are studying it with a view to finding a formula for implementing it.
Under the arrangement, mobile money companies will be required to put in place verification infrastructure with each of the authorised agents. The verification needed in the new directive is akin to that needed to get a new sim card and challenges like network outages and technical know-how will come into play.
A 2020 report by the Police’s Criminal Investigations Directorate (CID) revealed that at least Shs5 billion was fraudulently sent to 877 Airtel Uganda Sim Cards while 755 MTN Sim Cards fraudulently received at least Shs5. 5 billion via mobile money
