UGANDA: BOU Mandates ID Verification for Transactions above $260

In a bid to combat the rising threat of digital fraud, the Bank of Uganda (BoU) has introduced a new directive requiring ID verification for digital transactions exceeding $260. The move, which came into effect on April 19, aims to prevent cybercrime and protect citizens from financial losses.

According to the BoU, digital payments fraud has been on the rise in Uganda, with a staggering 30% increase in reported cases in 2022 alone. This translates to a loss of approximately UGX 120 billion (approximately $33 million USD) in the past year. “The new requirement is a response to the increasing incidence of digital payments fraud, which has targeted mobile money systems,” said Dr. Michael Atingi-Ego, Deputy Governor of the Bank of Uganda. “By verifying the identity of transaction holders, we seek to prevent fraudsters from using stolen or fake identities to access financial services.”

“The verification process will ensure that only authorized individuals can access digital financial services, reducing the risk of fraud and cybercrime,” Dr. Atingi-Ego added.

Innocent Kawooya, CEO of HiPipo, a leading digital age organization specializing in digital innovation, financial inclusion, inclusive finance, and FinTech, welcomes the move. “This is a crucial step in combating fraud and protecting citizens from financial losses. As an organization, we are committed to promoting digital financial inclusion and security, and we believe this move will enhance the overall digital financial ecosystem in Uganda.”

The ID verification process will involve the use of valid national ID cards, passports, or other accepted government-issued documents. This will ensure that only authorized individuals can access digital financial services, reducing the risk of fraud and cybercrime. The new requirement is also in line with international best practices in combating financial fraud. Many countries, including developed economies, have implemented similar measures to protect their financial systems from cyber threats.

While some citizens have expressed concerns about the potential challenges of the new requirement, the BoU has assured that the verification process will be secure, efficient, and inclusive. “We are working to ensure that all citizens have access to the required ID documents, particularly in rural areas where access to government services may be limited,” said Dr. Atingi-Ego.

The introduction of new-generation biometric national ID cards from June will further enhance the security of ID verification in digital transactions. These cards will contain advanced security features, including biometric data, to prevent forgery and ensure the integrity of the verification process.

In conclusion, the new national ID verification requirement for digital transactions is a crucial step in combating fraud and protecting citizens from financial losses. With the rising threat of digital fraud, this move demonstrates the BoU’s commitment to ensuring the security and integrity of the country’s digital financial ecosystem.

SOURE: EAGLEONLINE