Ugandans may soon be able to send electronic money at no fee if SafeBoda’s plan to implement this bears fruit.

According to Tim Jamieson, the SafeBoda Vice President of Payments and Finance Services, the company, which started as a ride-hailing app for Boda-Boda rides but later expanded its service offerings, seeks to provide a cheap ecosystem that allows its customers to send money across networks for free and drastically reduce the cost of withdrawing these funds.

“If you want to send sh5,000 across networks can cost you over sh1,000 to do so or sh2,000 if you are sending to two to three different networks; we think there is more that needs to be done here,” Jamieson said.

He added: “Mobile money ecosystems form such a large part of the backbone of Uganda and Africa as a whole, so there should be continuous improvements in how this is delivered.”

Jamieson noted that while cash is still a predominant method of payment in Uganda and across the African continent, the COVID-19 pandemic is steadily drawing people towards cashless transactions, which presents a great opportunity for Financial Technology Companies (FinTechs) to grow.

Jamieson who was speaking during the ongoing 40-Days 40 Fintechs initiative, however, said there is a need to work together as an industry to share knowledge, technology and regulatory stack and work with regulators to solve existing problems.

“We have a huge unbanked and underserved population; we have a high cost of time and money to access financial services, and at the same time we have this amazing fast-growing ecosystem of FinTechs that is coming through locally. We need to bring them together so that we solve these problems as together,” he explained.

NPS license

He said SafeBoda is in the process of getting a National Payments System (NPS) license from the Bank of Uganda for electronic money services.

He, however, said the firm is in the process of building a range of new products, including building a payments ecosystem, open-loop products, savings products and working capital loans, to enable more people to access financial services, easily and affordably.

He said the company will soon pilot its working capital loans product, to extend credit to the firm’s merchant partners to grow their businesses. 

SafeBoda, which is based in Nigeria but headquartered in Uganda, started off providing ride-hailing services six years ago, before expanding its service offerings to food and shopping, buying airtime and payments, among others.

While Jamieson commended BOU for the NPS, which he says has provided a stringent regulatory framework that will give customers confidence that they can transact with electronic money service providers safely and securely, some Fintechs expressed concern over the Act which was enacted mid last year, saying that it threatens to create monopolistic tendencies in the industry, given the stringent requirements required to get an operation license.

“A startup or a student at university with an innovative idea could be unable to try their solution out because he cannot afford to get a license worth millions of shillings. This law, unfortunately, protects big players; new entrants will be stifled before they even take off,” the Mallan Company Limited chief executive officer Malcolm Kastiro said.

He added that there is a need to find a way of helping new players to come and offer solutions so that they are not buried before they scale. 

Bob Moses Oyuru, the Cytrone chief executive officer, also said that most Fintech players may not be in a position to afford the fees imposed on them to get an operating licence.

The 40-Days 40-FinTechs initiative is organised by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

It seeks to enable FinTechs to innovate solutions that facilitate cross-network financial transactions at minimal risks to enhance access to financial services.

The HiPipo Chief Executive Officer Innocent Kawooya alluded that FinTech in Africa offers attractive opportunities, adding that investors are rightfully picking interest in the various startups that are offering a plethora of services, ranging from payments and lending, remittances, cross-border transfers and neobanks, among others.

He adds that the 40-Days 40 FinTechs initiative seeks to give exposure to the best emerging and transformative innovators of Africa.