Why you need National ID to transact Sh1m on mobile money

by Business Times writer
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With immediate effect, mobile money agents throughout the country will begin requesting a valid national identity card from customers before processing transactions exceeding Shs1m on the platform, as per a new directive by the Bank of Uganda.

The directive issued to all mobile money service providers covers both deposit and withdrawal transactions.

Bank of Uganda is implementing this directive after the National Payment Systems Act was enacted and put into operation, along with subsequent regulations.

Under the law, the Bank of Uganda took on complete responsibility and authority for regulating mobile money services in Uganda.

The Central Bank said it issued the directive to curb the rise in online fraud and scams.

“The Bank of Uganda observed a rise in the usage of mobile money platforms for online fraud and scams. Mobile money systems have occasionally been the target of cybercrime carried out by agents working with criminals,” the Central Bank said in a brief statement.

“Therefore, in compliance with Section 55(1)b of the National Payments Systems Act, 2020 and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021, all financial transactions involving Ugx.1,000,000 or more that are carried out at authorized agent locations and operator centers on digital financial service platforms must be completed after the holder’s identity has been verified using a valid national ID (for Ugandans), passport, refugee ID/attestation letter, or alien ID (for foreigners),” it added.

The rapid and widespread adoption of mobile money services in Uganda has caught the attention of millions of Ugandans.

Many Ugandans now view mobile money services not only as convenient but also as the easiest way to handle financial transactions without needing to spend time in the bank halls.

According to the Bank of Uganda Annual Report 2022-2023, during the year ending on June 30, 2023, the values of mobile money transactions increased significantly by 22.6%, rising from 156 trillion shillings in June 2022 to 191.3 trillion shillings. Similarly, transaction volumes rose by 20.8% from 4.8 billion to 5.8 billion over the same period

However, the increase in transactions has not been without consequences, including the rise in cyber-attacks.

According to Police Annual Crime Report 2023, a staggering shs1.5 billion was stolen in a series of harmful cyber-attacks in 2023 alone, indicating that the financial loss caused by cyber criminals is becoming alarmingly clear.

This underscores the pervasive threat these digital crimes pose to the Ugandan economy.

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