Uganda is experiencing a critical moment in its digital finance evolution: mobile money has enabled broad financial access, but the systems remain fragmented and isolated, creating a hidden tax for users and limiting true economic inclusion.
Despite rapid growth in mobile money usage, the country’s financial networks are not connected. Digital wallets and banking platforms operate in silos, forcing users to pay “tolls” when moving money between networks. For example, mobile payment fees are high for small transactions, eating into the savings of low-income users, and cross-border payments are even costlier and slower.
Fintech companies and traditional banks are now debating a shift to open systems, where platforms can interoperate. The core of the challenge lies in trust, control, and revenue sharing: financial service providers must decide how to share customer data and transaction profits. As one fintech leader put it, “letting go of control means trusting others with your customer base and that’s hard.”
New technologies like blockchain, tokenization, and stablecoins are emerging as potential solutions. These offer ways to connect accounts in real time, reduce transaction costs, and tap into cross-border trade. Fintechs such as Muda are pushing this vision forward, but many banks remain hesitant, citing security risks and legacy infrastructure.
An even bigger change could come with a national payments switch a project first announced by the Bank of Uganda in 2022. The plan is to have a single system that links banks, telecoms, and fintech platforms, and eventually connects to regional payment systems like COMESA’s. While the project was delayed after a contract cancellation, regulators now say a new version could be operating by 2026.
For those pushing for interoperability, the goal is clear: not just financial access, but financial liquidity the seamless flow of money across platforms and borders. As digital finance evolves, stakeholders believe that collaboration, not competition, could be the real key to building a truly inclusive and efficient financial system in Uganda.