Is card payment risky in Uganda

The surge in demand for digital payment services reflects this trend, with mobile money transactions experiencing a notable 7.7% increase in volume, soaring to Shs 62.2 trillion in the quarter ending December 2023.

In contrast, the value of debt card transactions remains relatively modest with an increase from Shs. 532 billion to 580 billion within the same period.

The Rise of Card Payments

Amidst this shifting landscape, the benefits of card payments (convenience, security and zero transaction fees among others) provide another viable option for payments given the significant rise in bank account ownership from 7 million in 2016 to over 203 million today.

However, several myths and misconceptions among Ugandans continue to hinder their full adoption and usage in comparison to received channels like mobile money.

Let's debunk some common myths about card payments:

Payments are Expensive - Contrary to popular belief, Visa payments come with zero transaction fees. This is a significant advantage over mobile money transactions, which often include extra charges.
Card Payments are Insecure - Security concerns have been a significant barrier. However, Visa's investment in technology has significantly reduced fraud, making card payments one of the safest transaction methods available.
Only for Large Purchases - The versatility of card payments is often overlooked. Whether for a morning coffee or a major appliance, card payments offer convenience and efficiency for all transaction sizes.
Lead to Overspending - Financial discipline is key, irrespective of the payment method. Cards, when used responsibly, can be an excellent tool for managing finances effectively.
Exclusive to High-Income Individuals - The reality is far from this. With the rise in bank account ownership, debit cards have become accessible to a wider demographic, breaking down financial barriers.
Contactless Payments are Less Secure - Advanced encryption and tokenization technology make contactless payments even more secure than traditional methods, offering both convenience and safety.

In reality, contactless payments employ advanced encryption and tockenization (a process of replacing the traditional payment card account number with a unique digital token in online and mobile transactions) which safeguard sensitive data against interception and fraud while ensuring data protection throughout customer transactions.

While no payment method is risk-free, the benefits of contactless payments—faster transactions and enhanced security—far outweigh perceived vulnerabilities. With ongoing advancements and industry adherence, contactless payments redefine convenience and security in modern finance, inviting consumers to confidently embrace their efficiency.