The Finance Committee of Parliament has approved a bill which seeks to provide for supervision and oversight of mobile money transactions. Currently, Uganda does not have a comprehensive payment system law.
As a result, there is limited regulation and oversight of payment systems and inadequate protection of payment and securities settlement systems according to the chairperson of the Finance Committee Henry Musasizi.
He says that this creates uncertainty in the market especially on licensing of payment systems service providers that fall out of the bracket of financial institutions.
He is optimistic that once enacted by parliament, the National Payment Systems Bill, 2019, will address the regulatory gaps that have affected users of such payment systems for some time.
Under the draft, an electronic money issuer who contravenes provisions of the Bill commits an offence and is liable on conviction to a fine not exceeding 20 million Shillings.
Besides the regulation of mobile money transactions, the Bill also provides for the protection of the payment and settlement systems against insolvency proceedings by providing for transfer orders finality and protection of collateral arrangements.
The Ministry of Finance earlier stated that the bill provides for electronic money issuance and circulation and how the issuance of mobile money will be licensed, supervised and regulated.
The Bill also provides on how to deal with dormant accounts held with electronic money issuers where after 10 years, the funds on the dormant accounts will be transferred to the Consolidated Fund.
A copy of the Bill shows that it provides for the licensing criteria, procedure and the regulatory power of the Central Bank concerning the imposition of norms, standards on operators of payment systems and the powers to obtain information and take enforcement actions to ensure compliance.
It also seeks to promote public confidence through increased certainty and transparency through ensuring principles of consumer protection guided by transparency, accountability, data protection, full disclosure of the information relating to services, confidentiality and dispute resolution mechanism.
SOURCE: DISPATCH UGANDA