In a recent announcement, MTN Uganda introduced charges on MoMoPay transactions, specifically targeting the Oil and Gas sector, including fuel stations. The move, effective immediately, has sparked a wave of reactions from Ugandans, who are expressing concerns about the potential impact on the country’s journey towards a cashless economy.

Previously a free service for several years, MoMoPay has played a crucial role in promoting digital financial services, contributing to the substantial growth in registered mobile money subscriptions, which reached 36.8 million by the end of December 2022, as reported by the Uganda Communications Commission.

However, the new charges, structured based on the amount of fuel purchased, have drawn criticism from the public. Many users argue that the introduction of fees may discourage the adoption of MoMoPay, with some expressing a preference for cash transactions to avoid extra costs.

Some users questioned the rationale behind the variable charges tied to fuel consumption, suggesting that a small standard charge would have been a more palatable alternative.

The move by MTN has raised concerns about its potential impact on the broader goal of achieving a cashless society in Uganda. While the country has seen positive trends in digital financial services, with a 4% growth in mobile money transactions during the first quarter of 2023, the introduction of transaction fees may hinder further adoption.

The debate extends to the regulatory landscape, with questions directed at the Bank of Uganda. Critics are asking whether these charges align with the broader strategy of fostering and enabling trade in a cashless economy. The Bank of Uganda had previously faced scrutiny over the cost of printing and issuing money, with lawmakers urging a shift towards promoting cashless transactions.

As Uganda grapples with the balance between financial inclusion and the affordability of digital transactions, stakeholders emphasize the importance of reasonable charges to ensure the success of the country’s transition towards a cashless society.