Points of Sale and merchants, mainly 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.
The surcharge imposed by merchants on the use of electronic payment cards is discouraging the use of debit and credit cards.
Commercial Bank has since 2018, increasingly encouraged 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
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.
// “Cue in: anyone who levies a fee…..
Cue out:….. the cash to make a payment.”//
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.
// “Cue in: From the discussions…..
Cue out: “…it’s limiting using their cards.”/
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.