KAMPALA — Bank of Uganda has with immediate effect ordered businesses to stop charging customers extra surcharge other than that set out with service provider of the given payment card.
The Central Bank also directed that no business owner is allowed to set a minimum or maximum amount as a condition to use the electronic card payments.
The directive was contained in circular, signed by Hannington Wasswa, the acting executive director for supervision.
“In practice, some merchants add a surcharge to transactions and/or establish minimum or maximum transaction amounts as a condition for accepting electronic card payments,” BoU wrote adding that: “[This is] unfair and unjustifiable business practices that are detrimental to the growth of electronic payments in Uganda.”
A growing number of businesses, including restaurants, bars, and shops in Uganda accept electronic card payments by debit or credit cards.
However, an extra charge – which is outside the normal fees one pays for using the service – makes this mode of payments very expensive.
This has meant that more people prefer to carry cash instead of cards to avoid these charges, crippling the grow of e-payments in the country.
Most payments in Uganda are still done through cash but government wants to move away from this to a more secure card-based payment system. Carrying cash comes with a risk of being robbed.
It costs at least between UGX 6,000 and UGX10,000 to transact using a card.