Kampala, Uganda | URN | Bank of Uganda (BoU) has asked businesses that accept electronic card payments to stop charging customers extra fees or surcharge other than that agreed up with service provider of the given payment card.
BoU also says no business owner is allowed to set a minimum or maximum amount as a condition to use the electronic card payments.
The directive took effect from 15 September 2019. The circular, signed by Hannington Wasswa, the acting executive director for supervision, was issued on 29 August 2019.
“In practice, some merchants add a surcharge to transactions and/or establish minimum or maximum transaction amounts as a condition for accepting electronic card payments,” BoU says.
It adds: “[This is] unfair and unjustifiable business practices that are detrimental to the growth of electronic payments in Uganda.”
Read Also: URA launches online tax payment system
A growing number of businesses, including restaurants, bars, and shops in Uganda accept electronic card payments by debit or credit cards.
However, an extra charge – which is outside the normal fees one pays for using the service – makes this mode of payments very expensive.
This has meant that more people prefer to carry cash instead of cards to avoid these charges, crippling the grow of e-payments in the country.
Most payments in Uganda are still done through cash but government wants to move away from this to a more secure card-based payment system. Carrying cash comes with a risk of being robbed.
It costs at least between 6,000 shillings and 10,000 shillings to transact using a card. Some businesses add a charge on those fees, pushing the cost to the highs of 20,000 shillings or more for a payment of just 1 million shillings.