UGANDA:Law governing Mobile Money in the offing


FEB 18,2014.


THE government through the Uganda Law Reform Commission (ULRC) is developing a law that will govern how mobile money and internet banking transactions are conducted in the country.

Mobile Money is money that is exchanged electronically through mobile phones. It also refers to the service to mobile phone subscribers that enables them to deposit cash and receive e-value into a virtual account, and to perform financial transactions.

Meanwhile, internet banking is a system that allows individuals to perform banking activities, via the internet. Such form of banking enables customers to perform routine transactions, such as account transfer, balance inquiries, bill payments, maintaining standing orders, downloading online account statements among others.

In Uganda, mobile banking and mobile money services are provided by institutions such as commercial banks, mobile network operators and non-bank financial bodies.

However, the rapid growth of effective commercial transactions with the aid of internet has caught Uganda off-guard.

Whereas the government has enacted electronic related laws and is in the process of enacting legislation of data protection, ULRC notes that it remains a point of debate as to whether these laws will be sufficient and adequate to address privacy issues and maintain the confidential nature of bank-customer relations.

Despite the lack of direct legislation, the sector now handles business worth trillions, owing to its speed, accessibility, convenience, affordability and relative safety. But it has also emerged as a frontier for breeding criminality, hence the need for legislation.

More so, the lack of specific law to regulate mobile financial transactions is envisioned as a potential limitation to their commercial viability due to the fact that users are not aware of who bears the responsibility in case of disputes arising or even allocating liability in cases of loss.

Addressing the press at ULRC headquarters at Workers House in Kampala yesterday, the Commission’s Secretary Lucas Omara Abong said the laws would heighten security of transactions undertaken through Mobile Money and internet banking.

The development of the law comes at a time when Ugandans are increasingly falling prey to fraud on Mobile Money and Mobile banking transactions, largely anchored on ignorance. Prosecution of suspects has also been hard due to lack of direct legislation.

Patrick Nyakana, the Commissioner Law Reform says the law seeks to address issues of security for electronic money transfer, consumer privacy and confidentiality, safety transactions and allocation of risks and liability under electronic money transfer.

The others issues targeted by the law include consumer complaint and dispute resolution, cross border electronic money transfer and regulation of mobile money services.

Participation of public

ULRC is now inviting members of the public to contribute to content of the law by participating in a study aimed at examining mobile money and internet banking transactions in Uganda and particularly issues that require regulation, security and legal and ethical standards requirements for these payment transactions necessary to protect the different institutions and their clients.

The Commission yesterday released an Issues Paper highlighting areas that need opinions of Ugandans, in light of generating debate on the concerns on which consensus or general trend of views on mobile money and internet banking can be discerned.

Areas of debate

First, identifying gaps in the legal framework with reference to the existing legal regimes that are relevant to mobile money and internet banking with view of bridging gaps.

Second, exploring solutions and proposals aimed at addressing the current challenges such as consumer protection, curbing fraud, system vulnerability, privacy and allocation of liability.

Third, identifying gaps in the regulatory and supervisory frameworks for the regulators

Fourth, identifying international best and next practices on operational and internal controls on security standards.

And, harmonizing the existing legislation which are relevant to mobile money and internet banking.


Methods of data collection include interviews, literature review, comparative analysis with other jurisdictions, technical working groups and a national feedback and building workshop.

After data collection, the ULRC will propose draft law for governing mobile money and mobile banking that will subsequently be forwarded to the parliament for debate and eventual passing.

Stakeholders can also access the Issues Paper at, where they can submit their comments.  You can also write to ULRC and post to its headquarters on eighth floor, Workers House in Kampala (PO Box 12149 Kampala).