Parliament has passed a Bill providing for supervision and oversight of mobile money transactions. This approval followed the adoption of Parliament’s Finance Committee report in a plenary sitting chaired by Speaker Rebecca Kadaga.
The approved legislation, the National Payment Systems Bill, 2019 is envisaged to provide a comprehensive payment system law whose absence had created limited regulation and oversight of payment systems and inadequate protection of payment and securities settlement systems.
Earlier, Henry Musasizi the Finance Committee Chairpery told parliament the absence of a comprehensive law created uncertainty in the market, especially on licensing of payment systems service providers that fall out of the bracket of financial institutions.
He said that the new legislation will address the regulatory gaps that have affected users of such payment systems for some time. It provides for electronic money issuance and circulation and how the issuance of mobile money will be licensed, supervised and regulated.
It will require mobile money service providers to get a licence from the Bank of Uganda and submit details of mobile money users to the institution.
Under the approved Bill, an electronic money issuer who contravenes provisions of this Act of Parliament commits an offence and is liable on conviction, to a fine not exceeding Shs 20 million.
Besides the regulation of mobile money transactions, the new legislation also provides for the protection of the payment and settlement systems against insolvency proceedings by providing for transfer orders finality and protection of collateral arrangements.
The law also provides on how to deal with dormant accounts held with electronic money issuers where after 10 years, the funds on the dormant accounts will be transferred to the Consolidated Fund.
The law provides for the licensing criteria, procedure and the regulatory power of the Central Bank concerning the imposition of norms, standards on operators of payment systems and the powers to obtain information and take enforcement actions to ensure compliance.