Parliament has passed the National Payment Systems Bill, 2019 that provides for the supervision and oversight of mobile money transactions across the country.
The approved bill seeks to provide a law for an all-round payment system and regulation on Mobile money transactions.
The mobile money system has been marred with limited regulation, inadequate protection of payment, and securities settlement systems.
Now, this bill requires mobile money service providers to get a license from the Bank of Uganda -BOU and then submit details of mobile money users to the central bank.
It provides for electronic money issuance and circulation and how the issuance of mobile money will be licensed, supervised, and regulated.
Also, an electronic money issuer who contravenes provisions of this Act of Parliament commits an offense and is liable on conviction, to a fine not exceeding 20 million Shillings.
The new legislation also provides for the protection of the payment and settlement systems against insolvency proceedings by providing for transfer orders finality and protection of collateral arrangements.
The law states how to deal with dormant accounts held with electronic money issuers where after 10 years, the funds on the dormant accounts will be transferred to the Consolidated Fund.
The law provides for the licensing criteria, procedure, and the regulatory power of the Central Bank concerning the imposition of norms, standards on operators of payment systems, and the powers to obtain information and take enforcement actions to ensure compliance.
The approval comes after the adoption of Parliament’s Finance Committee report in a plenary sitting chaired by Speaker Rebecca Kadaga.
Henry Musasizi the Finance Committee Chairperson had earlier told parliament the absence of a comprehensive law created uncertainty in the market, especially on licensing of payment systems of service providers that fall out of the bracket of financial institutions.
He said that the new legislation will address the regulatory gaps that have affected users of such payment systems for some time.