The Bank of Uganda (BoU) has mandated ID verification for all digital transactions exceeding one million Uganda shillings ($260), according to local reports.
Announced on April 19, 2024, through its official X account, this directive requires users to present a government-issued ID for transactions at or above this threshold.
The new rule targets the increase in fraudulent activities associated with mobile money systems, which have been vulnerable to schemes orchestrated by fraudulent agents in collusion with criminals.
The BoU’s message emphasized that these measures are in line with Section 55(1)b of the National Payments Systems Act, 2020, and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021.
Consequently, all significant financial transactions conducted at authorized agent locations and operator centers on digital financial platforms must now be authenticated by verifying the identity of the account holder.
For Ugandan citizens, a valid national ID card or a passport must be used for this verification process.
Foreign residents, including refugees and other aliens residing in Uganda, will need to provide a refugee ID/attestation letter or an alien ID, respectively.
However, the implementation of this directive has not been without criticism. Some stakeholders argue that the requirement could significantly slow down business transactions, especially impacting those among the population who do not possess ID cards.
There are also concerns about the potential increase in forgery of national ID cards as a result of this new regulation.
Amid these challenges, Uganda is preparing for a significant step in its digital security infrastructure with plans to begin mass citizen enrollment for new-generation biometric national ID cards starting in June.
This initiative is expected to enhance the integrity of digital transactions by improving the reliability of identity verification processes.
