The boom in e-transactions could phase out use of cheques

A boom in e-transactions could see the possible end of cheques in Uganda according to the Bank of Uganda. A huge number of payments these days are facilitated through electronic means as it is expected to increase in coming years.

Also read: Bank of Uganda issues license to MTN Mobile Money, Airtel

Only 10% of transactions made today are made through cheques. Financial technology has taken over, providing the most preferred modes of payment today marked by the introduction of mobile money in 2009 in Uganda. A lot of innovations have since evolved as people embrace e-payments.

E-payments are currently the most preferred mode of payment seeing as they create convenience, guarantee security and privacy to a large extent compared to traditional methods.

The Director of National Payments Systems at the Bank of Uganda, Mackay Aomu said as he spoke to NBSTV that cheques will be gradually phased out by January 2022.

Read also: Bank of Uganda launches regulatory sandbox to improve the startup ecosystem in Uganda

Cashless transactions have played a huge role during the pandemic seeing as paper money is one of the ways to spread the virus. Telecoms, who are the hosts of the mobile money platforms, in solidarity with the fight against the virus announced that they were scrapping sending transaction fees.

The move would later see the value and number of transactions during the period grow while the person to person transactions registered an equally substantial rise.

Experts assert that financial inclusion is one of the major catalysts for economic growth particularly in sub-Saharan Africa. Financial inclusion not only enables people to trade gainfully, it further ensures that they are able to save for the future, access credit and manage their finances.

Read more: How mobile money masked Ugandans against covid-19

A 2018 Finscope survey undertaken by Financial Sector Deepening Uganda (FSDU) found that 78 per cent of Ugandans are financially included mainly through mobile money.

Mobile Money has bridged the gap by taking these financial services closer to the people through providing a fast, secure, affordable and a convenient way of accessing financial services using a mobile phone, anywhere at any time.

Phasing out of cheques in other African countries

Different countries have fully taken on digital payments eliminating the use of cheques like in Namibia citing that they pose risks and weaknesses. Namibia and South Africa have followed a growing number of countries where the usage of cheques as payment instruments have come under scrutiny and/or been abolished altogether.

Read more: MTN reduces Mobile Money withdrawal fees

READ: Data protection: Safeguarding customers from fraudsters

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