Uganda: Mobile Payments Go International
In a matter of days it will be possible to send or receive money in Uganda across international borders at the push of a button on your cell phone. Subsequent to the $110m (sh282b) Visa Inc acquisition of Fundamo, a global mobile money firm, Africans especially those in Uganda and Nigeria will enjoy international mobile money transfers through a partnership with telecom company MTN.
The development is poised to increase amounts of money remitted to the country after media reports indicated that remittances from the diaspora increased to about $2 b (sh5trillion) from about $845 m (sh2trillion) between 2006 and 2010.
Central Bank reports indicate that remittances from workers in African countries like Angola, Namibia and South Africa are rapidly growing to match remittances from workers in overseas countries such as the UK and United States of America (USA) back home to Uganda.
At the end of 2010, the Money Remittance Fund had grown to sh1.9b in efforts to provide security to persons who deposit money with money remittance firms.
Jim McCarthy, head of product for Visa Inc says the company's VisaNet product will make reliable electronic payments a reality as well as increase access to formal financial services in the developing countries.
"Mobile technology has become the single most important driver of financial inclusion that is enabling financial institutions, mobile network operators and Visa to connect unbanked consumers to each other and the global economy," he noted.
Apparently, the new technology has the capacity to handle more than 20,000 transaction messages every second across more than 200 countries. This being the launch of the service, the jury is still out on the security of the transactions.
However, Visa and MTN give assurances that authentication through a PIN or password in addition to fraud monitoring capabilities will mitigate and prevent fraud.
Uganda and Nigeria are set to be the first beneficiaries of the service in Africa, according to press statements, as MTN rolls out the service to its 5.7m mobile money users on the continent.
"As the appetite for mobile technology grows, the launch of this product with Visa doesn't only enhance our current mobile money offering, but also represents yet another crucial milestone in our journey to bring value-adding services to the growing population of mobile phone users in our markets," said Christian de Faria, MTN Group boss.
Bank of Uganda regulates and oversees the mobile money operations of telecom companies Airtel, MTN Uganda, and Uganda Telecom (UTL) in the country.