The value of mobile money transactions rose to 145.6 trillion shillings in the last six months ending March 2022. Relatedly, the value of internet and mobile banking transfers rose by 82.8% and 146.1% respectively.
This comes amidst growing concerns from the public over the safety of mobile banking and transfer systems, with reports of theft by various people and financial institutions.
According to the Bank of Uganda, demand for digital channels continues to be driven by favorable policy or regulatory environment and the evolving consumer behavior, mainly accelerated by COVID-19 restrictions, and recovery in economic activity.
During the lockdown period, commercial banks and mobile money companies cut the costs of mobile phone-based transactions to encourage more people to avoid physical outlets, amidst calls for social distancing.
The total number of mobile money users grew to about 30 million, with MTN reporting a growth of 8.5 percent in the last six months end March 2022, to 15.9 million active accounts, according to their financial statements.
Amidst these growth figures, many users have fallen victim to fraudsters who are increasingly getting new ways of stealing money from accounts.
The companies insist that the main problem comes when subscribers fail to guard their PIN codes and that they have always urged everyone to keep them secret. It is also advised that subscribers set their codes using the digit combinations that are hard to guess by the fraudsters.
The companies also give the public the official numbers that they use to call the subscribers.
“If our customers follow the above 3 golden rules, nobody can have access to their Mobile Money wallet without the customers entering the 5-digit secret PIN into their phone themselves explicitly or unconsciously,” says MTN in a statement.
In March, an unnamed mobile money user claimed that they had lost 2.7 million shillings off their account.
MTN Uganda, the company named then, says that any suspicious action detected on the mobile wallet should be reported immediately to the company before any action is taken by the subscriber.
Recently, a video clip by another subscriber has circulated on social media to the effect that one Henry Bukenya lost more than seven million shillings when someone stole his mobile phone.
Bukenya says he has never understood how the fraudster got to know his codes to access his account, or the National Identification Number to have his phone number unblocked without his presence.
Airtel, the company named acknowledged receiving the complaint in November and the actions taken include blocking his account to investigate the reports.
A statement from Airtel Mobile Commerce Uganda Ltd explains that appropriate compensation was made to Bukenya and he received the money in February 2022.
Airtel acknowledges that there was insider connivance that enabled the fraud to happen and that the culprit was discovered and “appropriate action was taken.”
Other cases of fraud involve the fraudster initiating a withdrawal and giving a random or targeted mobile number to an agent, and the user of the number gets a message requiring them to enter their PIN.
A few have “absent-mindedly” entered their PIN, only to allow the fraudster to withdraw the money without the owner’s knowledge.
The regulator, the Bank of Uganda says most of the cybercrime in the mobile money industry is because of people’s low digital literacy.
The Director Financial Stability Department, Robert Mbabazize says they will continue and intensify public sensitization drives and enhance their regulatory role on the companies in line with the National Payments Systems Act mandate.