Surcharge discouraging use of electronic payment cards – Operators

Kampala, Uganda | THE INDEPENDENT | The surcharge imposed by merchants on the use of electronic payment cards is discouraging the use of debit and credit cards.

Commercial banks have since 2018 been encouraging the use of debit and credit cards by their customers to make financial transfers, banking as well as paying for goods and services like in supermarkets and fuel stations.

The banks have increasingly upgraded automated teller machine cards into payment cards, which can enable the holder to do many transactions with the bank and away from the bank, as well as being able to access their bank accounts outside the country.

The banks and the card companies like Visa, intend to push this as an addition to other electronic payment systems like mobile money, to develop a cashless economy, improve financial security and cost of transactions among others.

Points of sale and merchants, main supermarkets, are the main culprits in imposing the surcharge which the card operators and vendors say is not necessary but only adds to the cost of using the cards.

In the end, this discourages Ugandans from using the payment cards.

Uganda Bankers Association Head of Communications and Corporate Affairs, Patricia Amito says that the association is continuing with the effort to ensure the surcharge is no longer applied anywhere in Uganda.

However, the lack of a law criminalizing the practice is a hindrance to the efforts which impedes the use of this electronic system.

Kennedy Luhombi, the Senior Business Development Leader, Merchant Sales and Card Acquiring at Visa says the surcharge is like penalizing a customer for opting to use the electronic payment system and should be stopped.

On why the condemned practice persists, Arnold Kwesiga, Head of Card Acquiring at Absa Bank Uganda says the merchants claim they incur some cost of operation when a customer uses a card and this has to be passed onto the customer.

Uganda Revenue Authority-URA says the merchants have to pay a tax on the card.

Kampala City Traders Association chairman Everest Kayondo says the traders could be using the opportunity of the tax to overcharge the customers by claiming they are transferring the costs, which could discourage people from using the cards.

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