The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Commercial banks through their umbrella association, Uganda Bankers’ Association (UBA) have unveiled a campaign to eliminate surcharges faced by people using their cards to make payments for goods.
When customers use their bank cards to pay for goods, some traders charge an extra fee which is over and above the money paid for the product being bought, an illegal act.
According to Wilbrod Owor, the UBA executive director told reporters on Tuesday that the new campaign, No to Surcharges, will raise awareness among the card users and will also work with business owners to see that charges stop.
The campaign comes just under a year after Bank of Uganda last September announced that these extra charges were illegal and traders should stop levying them. BoU also says no business owner is allowed to set a minimum or maximum amount as a condition to using the electronic card payments.
“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 noted.
It added: “This unfair and unjustifiable business practices are detrimental to the growth of electronic payments in Uganda.”
For some businesses, they can charge one as much as 6% of the money they pay for a product as an extra charge for using the cards. In absolute terms, it can cost one between 6,000 shillings and 10,000 shillings to transact using a card.
Some businesses add a charge on those fees, pushing the cost to the highs of 20,000 shillings or more for a payment of just 1 million shillings.
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 means that more people prefer to carry cash instead of cards to avoid these charges, crippling the growth of e-payments in the country.
Most payments in Uganda are still done through cash but the government wants to move away from this to a more secure card-based payment system. Carrying cash comes with a risk of being robbed.
Salma Ingabire, the MasterCard Uganda country director said the surcharges harm the e-payments and financial inclusion.
She said that when people notice extra charges from what they are supposed to pay for the product, they simply turn back to cash.
“At least 2 million cards can be used to pay for goods. The bankers’ target to have at least 14.6 million accounts holders in banks using cards for payments”, Owor said.
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