Uganda

Payment Services Licensing & Legal Basis

The National Payment Systems Act 2020 brings payment service providers, electronic money issuers, mobile money operators, aggregators and payment gateways under Bank of Uganda licensing and oversight, closing a prior regulatory vacuum that existed outside the Financial Institutions Act 2004 deposit-taking regime.

Mobile money operators in Uganda are licensed as Electronic Money Issuers under the NPS Act 2020, with the National Payment Systems (Agent) Regulations 2021 governing non-exclusive agent appointment.

Conduct, Safeguarding & Promotions

E-money issuers in Uganda must hold 100% of issued electronic money in a trust account, if non-bank, or a special account, if a licensed financial institution, in unencumbered liquid assets that are withdrawable on demand. Conduct is governed by the National Payment Systems (Consumer Protection) Regulations, 2022, gazetted 9 September 2022, which Bank of Uganda is reported to be actively enforcing alongside a developing market-conduct supervision framework.

Stablecoins & Digital Money

Bank of Uganda's April 2022 circular barring all NPSA licensees from crypto-currency transactions was upheld by the High Court on 24 April 2023, Justice Ssekaana ruling that cryptocurrency is not an accepted general payment instrument under the current NPS regime. A vendor-led narrative complicates this settled position: Global Settlement Network and Diacente Group announced in October 2025 a partnership piloting a permissioned-blockchain 'digital shilling' CBDC tied to a $5.5bn tokenisation initiative, and Bank of Uganda published a CBDC-consultant application form in March 2026, but no Tier-1 Bank of Uganda announcement confirms a formal pilot launch.

Operational Resilience & Critical Infrastructure

Bank of Uganda's Cyber and Technology Risk Management Guidelines became mandatory for all supervised financial institutions effective 1 December 2024, layered on the National Payment Systems Act's existing 24-hour fraud and breach notification duty. That framework faced its sharpest test in January 2026, when MTN and Airtel mobile-money platforms were fully inoperative for about a week during a government-enforced digital blackout ahead of the 15 January general elections, before service resumed.

Scheme & Network Compliance

MTN Uganda has attained GSMA Mobile Money Certification, an independent scheme-level assessment of secure and reliable service delivery, consumer-rights protection, and AML/CFT capability — distinct from card-scheme rulebooks such as Visa, Mastercard or PCI-DSS. Scheme-level infrastructure for domestic switching remains unresolved: Bank of Uganda's National Payments Switch tender, launched July 2023 with more than twenty bidders, reached final evaluation with Paylogic S.A. reportedly the preferred bidder, before the process was unexpectedly cancelled amid lobbying claims and competing business interests, leaving domestic scheme infrastructure fragmented.

Payment Corridor Dynamics

Uganda's cross-border settlement runs through RTGS-integrated channels: the East African Payment System (EAPS) for EAC-currency transfers, and COMESA's REPSS, which settles in USD/EUR, alongside conventional SWIFT correspondent-banking channels. During the January 2026 telecom blackout, Ugandans routed MTN and Airtel mobile-money funds through Kenyan M-Pesa and Airtel Money wallets, converting Kenyan shillings back into Ugandan currency to ease domestic cash shortages, opening a fragile informal cross-border corridor.

Industry Structure & Commercial Dynamics

Uganda's banking sector is highly concentrated: the top ten banks control roughly 81% of industry assets, with Stanbic Bank the largest at UGX 10.34 trillion in 2024, approximately 19.52% of the industry total. That bank-centred concentration coexists with a fragmented, agent-driven distribution layer: the Agent Banking Company's shared platform supports more than 22,000 agents across banks, MDIs, MFIs, SACCOs and fintechs, now facilitating the large majority of cash-in/cash-out activity nationally.

Legal & Litigation

Justice Musa Ssekaana of the High Court ruled on 24 April 2023 that cryptocurrencies under the current NPS regime are illegal, unlawful and not accepted as a general payment instrument, dismissing the challenge to Bank of Uganda's crypto-transaction circular. In Abacus Parenteral v Stanbic Bank, the High Court split liability for a fraudulent-transaction loss, holding the bank 20% liable given inadequate fraud-detection systems and beneficiary-verification failures, with the customer bearing the remainder. Separately, BMS General Trading filed a 2026 judicial review challenging the Financial Intelligence Authority's October 2025 directive freezing its bank account on money-laundering suspicion, for lack of a reasonable basis or a hearing, testing the limits of the Authority's enforcement powers.

Merchant Acquiring & Risk

High-risk merchants — gaming, crypto and adult content — face limited local acquiring options given regulatory scrutiny and PSP risk policies, typically necessitating offshore payment facilitators. Standard Ugandan bank merchant agreements, such as Stanbic Bank's, permit acquirer payments to be reversed post-settlement if subject to a chargeback or claim, even after goods or services have already been provided.

Product Innovation & Market Development

Uganda's mobile money market was valued at $920.5 million in 2026 and is projected to reach $2,635.85 million by 2035, a 12.40% compound annual growth rate, with Bank of Uganda restructuring capital-adequacy requirements for operators.

A tiered KYC framework is restructuring mobile-money customer onboarding and transaction limits.

The mobile money sector counts over 43 million registered accounts processing UGX 326.3 trillion annually, with 2024 transaction value of UGX 253.7 trillion exceeding commercial-bank assets; rising transaction taxes are reported to be pushing usage back toward cash.

Consumer Protection & APP Fraud

Bank of Uganda's April 2024 directive requires national-ID, passport, refugee or alien-ID verification for mobile-money transactions of UGX 1 million or more conducted at agent locations, citing rising fraud and scam usage of mobile-money platforms. The persistent fraud risk was illustrated by a significant SIM-swap-enabled mobile-money fraud incident resulting in an estimated $3.2 million loss, using approximately 2,000 SIM cards to infiltrate the payment system and instruct transfers dispersed across those cards.

AML/CFT & Financial Crime (Sentinel.gi-fed)

sentinel.gi position: Uganda is an ESAAMLG member assessed under the FATF framework, with a documented history of grey-list membership tied to its 2016 mutual evaluation. The Financial Intelligence Authority's inaugural National ML/TF Risk Assessment on Virtual Assets, published September 2025, found $564 million in virtual-asset inflows and $546 million in outflows between July 2020 and June 2024, despite the standing crypto-transaction ban — intelligence this Monitor carries as payments-context only, per Sentinel.gi feed attribution, with illicit-finance analysis routed to the Financial Intelligence Monitor.

Correspondent Banking, Settlement & Access

Bank of Uganda has imposed new over-the-counter cash-withdrawal caps effective 1 January 2027, setting individual limits at UGX 50 million per day (UGX 250 million per week) and corporate limits at UGX 500 million per day (UGX 2.5 billion per week).

Concurrently, interbank cheque value thresholds are being halved, with the local-currency ceiling falling from UGX 10 million to UGX 5 million, running alongside the cash-withdrawal policy.

Commercial Intelligence (M&A, Investment & Product)

Bank of Uganda partnered with Swedish vendor CMA Small Systems to migrate the UNIS RTGS platform to the CMA RTS/X system, a completed product release supporting ISO 20022 messaging, real-time multi-currency settlement, and delivery-versus-payment / payment-versus-payment functionality; contract value was not publicly disclosed. Global Settlement Network and Diacente Group announced, in October 2025, a partnership framed around a Uganda CBDC pilot tied to a broader $5.5 billion tokenisation initiative; the announcement is vendor-sourced and not yet confirmed by any Tier-1 Bank of Uganda publication. The Bank of Uganda National Payments Switch tender was terminated after Paylogic S.A. reportedly emerged as preferred bidder, amid lobbying claims and competing business interests — the same underlying procurement event tracked separately in W4. The Capital Markets Authority separately launched its Fintech Regulatory Sandbox product in October 2025, now holding four active applications — a regulatory-sandbox product launch distinct from the pre-existing Bank of Uganda NPSA sandbox track.