0

2.2m accounts cleaned off mobile money networks in three months

Tech02pix Mobile Money Mobile money companies are cleaning their registers, eliminating inactive subscribers

Sat, 17 Jul 2021 Source: monitor.co.ug

At least 2.2 million mobile money accounts were cleaned off telecommunications networks in the first quarter of 2021 leading to March, according to a report by Uganda Communications Commission (UCC).

However, the UCC Market Performance quarterly report, which trucks different aspects in the telecom sector, does not state which particular month or why the “clean-up” was conducted and what it sought to achieve.

“Following a clean-up of mobile network operators’ account registers, the number of active mobile money accounts was revised downwards, from 22.5 million to 20.3 million at the end of March 2021,” the report reads in part.

Certain provisions under the recently enacted National Payment Systems Act 2020 provide for suspension or deletion of inactive subscribers from the mobile money system.

According to the report, the clean-up, which has been ongoing since last year leaves only 66 per cent out of the 30.5 million registered mobile money accounts as active users.

This means there are at least 10.2 million inactive mobile money accounts.

Mobile money has been one of the fast growing sectors boosted by massive penetration in the mobile telephone sector and diversification of the mobile phone functions.

For instance, according to the report, more than five million new accounts were registered between March 2020 and March 2021, which was fueled by significant fees waivers, increased merchant acceptance and limited movements due to Covid-19.

Mobile money is now governed and regulated by Bank of Uganda under the National Payment Systems Act.

The Act effectively separated mobile money from telecommunications services and is now considered as a standalone business that must be subjected to financial regulatory functions.

Under the Act, a mobile money or an electronic money account that does not register a single transaction within nine months shall be considered dormant and considered for suspension or eventual deletion.

It is not clear what UCC or Bank of Uganda, which recently took over regulation of mobile money services, intend to handle the pileup of the 10.2 million inactive users. The report does not explain why the accounts are inactive.

Under the National Payment Systems Act, an electronic money issuer, among which include mobile money companies, shall, after nine months of no activity, be required to give the account holder a month’s notice, informing the customer of the pending suspension “unless there is a transaction on the account”.

The Act, which is part of the larger plan to streamline the operations and regulation of mobile money, seeks to fast-track the cashless economy, which the Central Bank had in 2017 said would be achieved next year.

It also effectively requires telecoms to establish subsidiary and standalone mobile money companies regulated by Bank of Uganda.

Already two telecoms, including MTN and Airtel have been issued with licenses that authorize them to establish standalone mobile money companies while other applications are still under consideration by Bank of Uganda.

Handling a suspended account

The National Payment Systems Act, which is being implemented under the National Payment Systems Regulations, provides an opportunity for the account holder to reactivate it after it has been suspended, failure of which details of the the holder shall be transferred to the Central Bank.

If no claim is lodged by the account holder or any other authorized person within seven years, the unclaimed balances shall be transferred to the Consolidated Fund.

Source: monitor.co.ug