Uganda’s central bank is accelerating efforts to deepen digital financial inclusion, with officials highlighting plans to reduce transaction costs and improve interoperability across mobile money platforms as a key driver for youth-led small and medium enterprises (SMEs).
Speaking last week during the 4th Annual National Labour Convention & Expo organised by the Ministry of Gender, Labour and Social Development, Arnold Bagubwagye, Acting Director of National Payment Systems at the Bank of Uganda, said the institution’s Digital Drive Project is designed to ease the cost and complexity of digital transactions.
Bagubwagye, who represented the Deputy Governor, said the transition from cash-based transactions to digital payments is critical for unlocking growth among young entrepreneurs, but noted that high transaction fees remain a major barrier.
“The most critical pathway to accelerating youth-led SMEs is the transition from cash-based to digital payment systems, but young people often struggle with high transaction costs,” he said.
He explained that under the Digital Drive Project, the central bank is working to enable seamless interoperability between mobile money platforms such as Airtel Money and MTN Mobile Money. This would allow users to transact across networks without restrictions.
“Under this system, Airtel will be able to pay MTN and vice versa, with each having a unique wallet that is not mixed with the recipient’s personal mobile wallet,” Bagubwagye said.
The initiative is part of broader reforms aimed at strengthening Uganda’s National Payment Systems and improving efficiency in digital financial services, particularly for small businesses and informal sector players.
Bagubwagye also revealed that the central bank is developing a national QR code standardisation framework to further simplify digital payments for businesses.
“Businesses will be able to have a QR code that is linked to all wallets and banks to facilitate smooth payments,” he said.
The proposed system is expected to allow customers to pay merchants using any mobile money service or bank app by scanning a single unified QR code, reducing friction in retail transactions and improving business efficiency.
Financial sector analysts say the reforms could significantly expand digital commerce, especially among young entrepreneurs who dominate Uganda’s informal economy but face high transaction costs and interoperability challenges.
If successfully implemented, the Digital Drive Project is expected to strengthen Uganda’s push toward a cash-lite economy, improve financial inclusion, and create a more integrated digital payments ecosystem across banks and telecom operators.
