Kampala, Uganda | THE INDEPENDENT | The suspension by Bank of Uganda (BOU) of the operations of Pivot Payments Ltd has raised fresh regulatory questions regarding Uganda’s financial sector.
The Central Bank on Thursday suspended the licenses of the company, citing Section 13 of the National Payment Systems Act, 2020.
The Bank of Uganda has effective February 29, 2024, suspended the licences of M/S Pivot Payments Limited as a Payment Service Provider and a Payment Systems Operator.
“Bank of Uganda through its oversight role has established that M/s Pivot Payments Limited is conducting business in a manner that is detrimental to the best interest of the public and endangers the stability of the financial system,” said BoU Deputy Governor, Michael Atingi-Ego.
in his statement, he advised all existing wallet holders of the company to report to its premises at Plot 17, Golf Course Road, Kololo, Kampala, to verify the wallet balances and Know Your Customer (KYC) information starting from Thursday February 29th.
“Bank of Uganda assures the public that it will continue to provide oversight and protection of payment systems in Uganda,” he promised.
Following the announcement by the regulator, the company apologised to the customers and assured them that the issues outstanding would be resolved soon.
“We wish to apologise to our esteemed clients, partners and the general public…Please be assured that management is committed to resolving this issue,” they said in a statement, promising that they will soon be back. “Therefore, we are working with the regulator and relevant stakeholders to have the licenses reinstated and normalise business operations as soon as possible,” said the company.
We appreciate your support as we navigate this challenging time, Louis Namwanja Kizito of Pentagon Advocates challenged BoU’s decision made the National Payments Systems (NPS) department to suspend Pivot’s operations as old-fashioned.
“As a lawyer representing several fintech companies, I believe that they need to adopt a more forward-thinking mindset. Unfortunately, their current approach is reminiscent of typical old-fashioned government bureaucrats,” he asserted.
He said the fast-growing Fintech industry should instead be helped to grow and therefore be handled carefully. “Fintechs are fast-evolving and they need regulators that are forward thinking because the space is in a constant state of flux. Bank of Uganda’s reckless regulatory overreach is causing a lot of frustration and hindering the growth of the fintech ecosystem in Uganda!”
Another lawyer, Silva Kayondo of Ortus Advocates says the developments at Pivot reveals challenges in the regulatory regime. “Being involved in this matter has left me with a lot of public policy/regulatory questions and a genuine concern for our fintech ecosystem in Uganda,” he says.
In May last year, Shamirah Kimbugwe, the company’s founder revealed their big dreams including becoming the first purely digital bank in Uganda. It has operations in several other African countries including Ghana, Kenya, Nigeria and Tanzania and boasts more than 250,000 mobile wallets.
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