The landscape of financial payments in Uganda is rapidly evolving as consumers increasingly prioritize convenience and speed in their payment methods. The surge in demand for digital payment services reflects this trend, with mobile money transactions experiencing a notable 7.7 percent increase in volume and a 2.9 percent uptick in value, soaring to UGX 62.2 trillion in the quarter ending December 2023. In contrast, the value of debit card transactions remains relatively modest with an increase from UGX 532 billion to UGX 58 billion within the same period.
Amidst this shifting landscape, the benefits of card payments (convenience, security, and zero transaction fees among others) provide another viable option for payments given the significant rise in bank account ownership from seven million in 2016 to over 23 million today. However, several myths and misconceptions among Ugandans continue to hinder their full adoption and usage in comparison to received channels like mobile money.
In recognition of this challenge, Visa, in collaboration with the Ugandan Bankers Association, an umbrella organization for at least 34 supervised financial institutions, launched the Sasuza campaign in 2021. This initiative aims to create awareness and consumer education on the benefits and convenience of Visa card payments by encouraging consideration and trial. We debunk the common myths that Ugandans have about card payments.
- Card Payments are Expensive
One of the most common misconceptions about card payments is that they are expensive. Some Ugandans believe that using cards for transactions comes with hidden charges from merchants, making them less cost-effective than cash.
However, this is not true. Unlike mobile money transactions, all Visa payments attract zero transaction fees for every payment made by a card user. Visa, in collaboration with the Uganda Bankers Association, is educating customers about zero transaction fees as well as the Bank of Uganda’s circular banning the addition of surcharges by merchants for any card payments. You can access the educational document HERE
- Card Payments are Insecure
Another myth that surrounds card payments is the belief that they are not secure. Some people worry that using their card online or at a point-of-sale terminal puts their personal and financial information at risk of being stolen by hackers or fraudsters.
While it’s true that there are risks associated with any form of digital transaction, card payments are highly secure when proper precautions are taken. Globally, Visa has invested more than $10 Billion in technology upgrades to reduce fraud and enhance security which led to over $27.1 billion worth of attempted fraudulent payments across 122 million transactions, stopping fraudsters in their tracks in 2022 alone.
Furthermore, Visa is partnering with banks and merchants to implement these security features and educate consumers about best practices for card security.
- Card Payments Are Only for Large Purchases
The misconception that card payments are only suited for large purchases overlooks the versatility and convenience they offer for transactions of any size. From buying a morning cup of coffee to investing in major appliances, card payments streamline the purchasing process for both consumers.
Moreover, the widespread adoption of contactless payment technology has further facilitated the use of cards for small transactions, allowing for quick and hassle-free payments. As consumer preferences shift towards digital transactions, the notion that card payments are exclusively for significant expenses is rapidly becoming outdated, highlighting the adaptability and accessibility of card-based payment systems in today’s economy.
- Card Payments Lead to Overspending
The myth that card payments lead to overspending is rooted in the misconception that the ease of swiping a card fosters impulsive buying. However, the reality is that responsible spending habits are independent of the payment method. Whether using cash or cards, it’s the individual’s discipline and financial literacy that dictate their spending behavior.
Effective budgeting techniques, such as setting spending limits, tracking expenses, and prioritizing needs over wants, are crucial for managing finances responsibly regardless of payment method. With conscious efforts to cultivate self-control and financial awareness, card payments can be harnessed as practical tools for staying within budget and achieving financial goals. Thus, rather than blaming the payment method, empowering individuals with financial education and sound money management practices is key to fostering responsible spending habits in the digital age.
- Card Payments are Only for High-Income Individuals
The prevailing belief that card payments are exclusively reserved for a select group of individuals perpetuates a misconception that undermines the widespread adoption of cashless transactions in Uganda. However, a closer examination of the accessibility and user-friendliness of card payment systems reveals a far more inclusive and accommodating landscape than commonly perceived.
Contrary to the notion that card payments cater only to a privileged few, most financial institutions under the Uganda Bankers Association offer debit cards to customers as a standard feature upon opening an account. This means that whether one is a seasoned professional, a small business owner, or a student embarking on their financial journey, the accessibility of debit cards serves as a gateway to a more convenient and secure mode of conducting transactions.
Moreover, the user-friendly nature of card terminals and point-of-sale systems further enhances the accessibility of card payments to individuals across different technological proficiency levels. Designed with simplicity and intuitiveness in mind, these systems empower users to navigate the transaction process with ease, regardless of their familiarity with digital technology.
- Contactless Payments Are Less Secure Than Traditional Swipe Methods
Contactless payments, allowing consumers to tap cards or mobile devices on terminals, have surged in popularity for their speed and convenience. Despite their rising acceptance, concerns linger about their security and vulnerability to interception or unauthorized access. compared to traditional swiping methods.
In reality, contactless payments employ advanced encryption and tokenization (a process of replacing the traditional payment card account number with a unique digital token in online and mobile transactions) which safeguard sensitive data against interception and fraud while ensuring data protection throughout customer transactions.
While no payment method is risk-free, the benefits of contactless payments—faster transactions and enhanced security—far outweigh perceived vulnerabilities. With ongoing advancements and industry adherence, contactless payments redefine convenience and security in modern finance, inviting consumers to embrace their efficiency confidently.
With these common myths and misconceptions debunked, we hope that you can freely and securely use a Visa card for your next payment —whether as small as UGX5,000 for a cup of coffee or any higher transaction online as we progress to a cashless economy.
