Experts in the banking sector have identified the uneven establishment of infrastructure, such as internet connectivity and electricity, along with a lack of public awareness, as major obstacles to the adoption of contactless transactions in Uganda.
This came up in an engagement between the Uganda Bankers Association Committee for Digital Financial Services and Visa, a global payment technology company, held at the Golden Tulip Hotel in Kampala Wednesday.
Salma Ingabire, the Country Director for Visa, emphasized that the payment landscape is shifting towards mobile platforms, highlighting the need to transition from card payments to mobile payments, where any mobile device, such as a smartphone, can be used for transactions.
Ingabire stated that the foundation for digital payments is currently contactless, driven by technological advancements that make payments easy, fast, secure, and convenient through phone or card tapping, regardless of the source of funds.
She also highlighted that over 50% of Ugandans are using mobile money, which presents an opportunity to leverage digital platforms. However, Ingabire noted that the activation rate for contactless transactions is low due to safety concerns and a lack of awareness among many Ugandans.
Bankers raised concerns about the limits imposed on contactless transactions for card verification methods, particularly the requirement of a PIN during a transaction. Currently, different banks in Uganda have different thresholds for allowing contactless transactions, leading to a lack of uniformity and confusion among card users.
Paul Mutethia, a Business Development Leader at Visa from Kenya, emphasized the need for the Ugandan market to agree on a universal amount for contactless transactions and suggested implementing rules to determine liability in case of transaction faults involving bankers, cardholders, and merchants.
Wilbrod Humphreys Owor, the Executive Director of the Uganda Bankers Association highlighted the importance of setting a maximum limit of 190,000 shillings for contactless transactions without requiring a PIN. This measure aims to minimize cyber fraud by preventing the withdrawal of all funds from a stolen card.
Owor also stressed the need for education and awareness campaigns targeting card users and merchants to increase the adoption and usage of contactless transactions among Ugandans.
According to Visa, in East Africa, Mauritius has the highest penetration of contactless transactions and digital banking at 46%, followed by Kenya with less than 10%, Uganda with 1.4% penetration, and Tanzania with less than 2%.
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