Bank of Uganda’s ID Verification directive for transactions above $260 faces resistance

·
April 29, 2024
·
2 min read
A building of the Bank of Uganda

The news: 

  • The Bank Of Uganda (BoU), the East African country’s apex bank, has issued a directive that makes ID verification compulsory for all digital transactions amounting to or exceeding Ugx 1 million ($260).
  • Per this new directive, all users who intend to send at the limit or above the stipulated amount will be required to provide government-issued ID cards to complete the transaction.
  • The central bank cited the continuous rise of perpetrators who use mobile money platforms for online fraud and scams as the reason for the development. 

Critics argue that the new regulation could result in several challenges, including slowing down business in the country given that many Ugandans don’t have ID cards.

Some industry experts maintain that the BoU directive could increase the national ID card forgery market, a concern that aligns with the findings of a 2024 Smile ID report, which warned that criminals attempt to bypass fintech security using compromised government-issued IDs.

On April 19, 2024, a Ugandan news outfit tweeted that “Mobile Money agents will, with immediate effect, start demanding a valid Identity Card before a customer transacts more than Ugx. 1 million on the platform, according to a new directive by the Bank of Uganda. Details in the Daily Monitor.”

The BoU, in response to the tweet on the same day, confirmed the report, explaining that it only became necessary following several incidents of agents’ collusion with criminals to target and defraud mobile money systems.

Advertisement

Exercising its regulatory powers, the BoU gave the orders, which comply with Section 55(1)b of the National Payments Systems Act, 2020 and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021. 

Effectively, all Ugandans must verify their identity using a valid national ID card or a passport before they can process financial transactions “involving Ugx. 1,000,000 or more carried out at authorised agent locations and operator centres on digital financial service platforms.” 

Foreigners seeking to process transactions within the specified amounts in the East African nation can use a refugee ID/attestation letter, or an alien ID to verify their identity.The Ugandan National Identification and Registration Authority (NIRA) has announced plans to add iris biometrics to its national ID to enhance security. Enrollment for the new IDs, valid for ten years, is expected to commence on June 1, 2024 and run through January 2025.


Got a tip? Our journalists are ready to dig deeper. Please share your insights and information and help us uncover the stories that matter.

Subscribe To Techpoint Digest
Join thousands of subscribers to receive our fun week-daily 5-minute roundup of happenings in African and global tech, directly in your inbox, hours before everyone else.
This is A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day! 
Digest Subscription

Give it a try, you can unsubscribe anytime. Privacy Policy.

Other Stories

43b, Emina Cres, Allen, Ikeja.

 Techpremier Media Limited. All rights reserved
magnifier