UBA Executive Director: Eva Ssewagudde (left), Director Strategy and Innovations, Uganda Bankers Association, Wilbrod Owor (center), Uganda Bankers Association Executive Director and Patricia Amito (right), Head Communications and Corporate Affairs, Uganda Bankers Association at the launch of the ‘No Merchant Surcharge’ campaign.
Industry

Banks waive Merchants Surcharge for 6 months

Uganda Bankers Association (UBA) has launched the ‘No Merchant Surcharge’ Campaign dubbed “Pay with your Card @ No Extra Cost”.

The campaign aims to raise awareness of the Card payment system. The campaign aims at eliminating the practice of merchants levying extra fees for electronic payments made using Point of Sale (POS) machines.

According to UBA Executive Director Wilbrod Owor, in August last year, Bank of Uganda issued a directive that prohibits merchant surcharging at Points Of Sale terminal and the fixing of minimum/maximum transaction amounts on electronic payment cards.  This was in a bid to drive the growth and uptake of Digital Financial Services.

Through this campaign, UBA will educate consumers on the No Surcharge Rule where cardholders should not be compelled to pay additional fees for using their payment cards of choice instead of cash at a point of sale.

“The consumer, therefore, should enjoy the benefit of no extra fee charged from the Bank’s partners or merchants such as stores, supermarkets, hotels, restaurants, bars and fuel stations,” said Owor.

Banks have over the past months sensitized their merchants, encouraging both current businesses to drive up volumes of payments done by card and also encourage new businesses to adopt the electronic payment system.

“Merchants will enjoy service with reduced risk of counterfeit notes, loss of monies by theft or otherwise, as well as carrying loads of money from or to the bank,” he added.

Salma Ingabire, Visa’s Country Manager for Uganda, explained that surcharging has an adverse impact on electronic payments growth and ultimately on financial inclusion.

“We believe that consumers should be free to choose their preferred form of payment and those who decide to pay with payment cards should not be penalized.

“Visa’s no surcharging protection was created specifically to shield consumers from retailers who seek to impose surcharge fees and penalize consumers who choose Visa over other forms of payment.

“Surcharging unfairly shifts the cost of doing business onto consumers. We will continue to work with our financial institution partners like UBA and retailers to ensure the practice of card surcharging is not permitted on all card transactions,” said Ingabire.

Frank Molla, Director, Country Business Development, East Africa Growth Markets, Mastercard noted the practice of applying surcharge fees frustrates the efforts of financial institutions and card scheme providers in facilitating convenient payment and access to services.

“The growth of digital technology has presented people with access to innovative, affordable solutions that help them meet their financial needs, ultimately leading to financial inclusion and increased prosperity.

“By giving customers the flexibility to pay for goods and services via their bank card on terms that work for them, we are driving safety and convenience. At Mastercard, we aim to ensure we not only provide access but that together we also ensure the usage of our financial tools to assist Ugandans to transact seamlessly and affordably.”

The campaign which will run for six months, initially starting in the Central region for 3 months. It is expected to go a long way in increasing awareness on the benefits of card usage and ensure Ugandans transact at no extra cost while using digital payment systems.