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UGX721M Mobile Money Transactions Were Made in Q3 of 2019, Valued at UGX19TN

The Uganda Communication Commission (UCC), communication sector report of 2019 released last month showed that UGX721 million transactions were made in third quarter (Q3) of 2019, valued at UGX19 trillion.

In the same report, registered mobile money subscriptions grew by two million between Q4 of 2018 and Q3 of 2019 while subscribers that were active over 90 days grew by 1 million.

The report covers the period from July – September 2019 but also includes information from Q4 of 2018 for comparison purposes. It also shows that the data was sourced from Bank of Uganda (BOU); the central bank of Uganda.

Therefore, between Q4 of 2018 and Q3 of 2019, the number of transactions and its value grew by 7.1% and 8.7% respectively. The transactions were executed by 206,683 agents. The number of agents grew by 2.9% from Q3 of 2018, leading to a reduced average service ratio of 76 active subscriber per agent.

UGX721 million transactions were made in Q3 of 2019, valued at UGX19 trillion | UCC Communication Sector Report, September 2019.
UGX721 million transactions were made in Q3 of 2019, valued at UGX19 trillion | UCC Communication Sector Report, September 2019.

Despite the Excise Duty Act 2018 which imposes 0.5% levy on withdrawal transactions, the numbers keep increasing as seen from the previous quarters. Before the levy was 1% on all mobile money transactions including; sending, receiving, and withdrawal, which discourage a number of people to halt from using the service due to the high cost of the tax.

The government had to revise the levy to 0.5% charging only withdraws, even though previously while at 1% in full effect, URA registered more collections.

Mobile money is an electronic wallet service that allows people to receive, store and spend money using a mobile phone. It has grown to become a popular alternative to both cash and banks because its ease to use, convenience, and secure. The service can be used anywhere there is a mobile phone signal — one reason people have resorted to using it instead of banks.

With fear of running out of business, banks are joining the mobile money space for survival.

A study done by Kabanda, D. K. (2014), “the impact of mobile money services on the performance of the commercial banking sector in Uganda”. Showed that banks have experienced both a decline in profitability and liquidity in recent years and this to some extent has been attributed to the growth in use of mobile money services.

Now telecoms and banks are partnering as the two seek to exploit the power of synergies to grow their revenues. The gap between commercial banks and mobile money service providers continues to get thinner by day as the two continue synchronizing service provision to offer seamless customer experience.

With mobile money, one could store, send, receive money as well as pay for services including utility payment, savings and loan — which were originally done in a bank. This made it become increasingly difficult for banks to stay competitive in the market. Hence, the partnership.

Anyone with mobile phone can have a mobile money account. It’s so accessible, which makes it extremely useful in more remote parts of the world, where there no banks.

Now banks with the authority from telecoms, allow their customers access their bank accounts on their mobile phones, through the mobile money platform. While in a remote area where there are no banks, you can now easily access it via your mobile phone.

One is for instance able to withdraw money right from a bank account into the mobile money account as well as make a deposit (from mobile to bank). They can as well check their bank account balance, and do more like pay utilities.

Mobile money with no doubt has changed the financial landscape in the country since its introduction in 2009 and is as well approving a reality of a cashless society.


Staff Writer

All articles published by Staff Writer have been contributed by all our reporters and edited and proofread by our editorial team.
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