Uganda’s festive spending shift: Why digital payments and financial discipline matter

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The festive season is one of the most vibrant periods in Uganda’s economic calendar. Families gather, communities celebrate, travel increases, and small businesses experience a surge in demand.

From buying gifts and food to paying school fees in advance or funding travel plans, spending peaks and, increasingly, those transactions are happening digitally.

Over the past few years, Uganda’s payment landscape has undergone a significant transformation. Data from the Bank of Uganda indicates that mobile banking users have surged to 2.1 million, with transactions hitting sh15.5 trillion by June 2025.

This shift reflects a growing preference for digital channels as customers value convenience.

For many consumers, the ability to pay quickly and seamlessly has become non-negotiable. Whether purchasing goods online, paying at a point of sale, or settling bills remotely, digital payments have reduced friction and expanded access.

For merchants, especially small and medium-sized enterprises, digital acceptance tools have opened new opportunities to serve customers beyond cash-based transactions, improve record-keeping, and manage seasonal demand more efficiently.

Across the financial services sector, banks and payment providers have responded. As the leader in card payments, issuing over 70% of credit cards and processing most card payment volumes, it is imperative that Absa responds by strengthening card infrastructure, expanding merchant acceptance, and introducing tools such as virtual cards, contactless payments, and pay-by-link solutions.

These innovations are particularly relevant during the festive period, when queues are longer, fraud risks increase, and consumers prioritise ease and reliability. Our investments in card infrastructure, merchant solutions, and digital wallets position us as a market leader. 

Gone are the days of long bank queues to draw enough cash to tide you over during the festive season. Regardless, convenience also brings new challenges. The ease of digital payments can blur the line between planned spending and impulse purchases. A few taps on a phone or card can quickly add up, and many households feel the consequences in January when financial pressure sets in.

This reality underscores the importance of financial discipline alongside payment innovation. Digital channels are not just transaction tools; they can also support better money management. With the support of our Absa digital platforms, customers have access to tools including budgeting features, spending alerts, savings goals, and instalment options, which help them stay in control, even during periods of heightened expenditure.

Financial literacy and practical guidance are therefore just as critical as technology. By planning ahead, prioritising needs, and tracking spending, you can ensure that the joy of the festive season does not turn into financial stress in the months that follow.

As transaction volumes rise during the holidays, so do risks related to fraud and cybercrime. Trust in digital payments depends on robust security frameworks, real-time monitoring, and informed users. For us, continued investment in fraud detection, data protection, and customer education is essential to safeguard both consumers and businesses.

For businesses, especially those onboarding to digital payments for the first time, simple and secure systems can make a significant difference. Faster onboarding, transparent pricing, and reliable settlement processes allow businesses to focus on growth while meeting customer expectations.

As consumers and businesses prepare for the holidays, a few simple steps can make festive spending more secure and manageable. Consider using virtual or tokenised cards for online purchases to reduce exposure, enable transaction alerts to monitor spending in real time and set a clear festive budget and track expenses as the season progresses. For merchants, using contactless and digital payment options can reduce cash handling risks and improve customer experience.

The festive season should be a time of connection and celebration, not financial strain. As Uganda’s economy continues to digitise, the focus must remain on balance, enabling fast and convenient payments while promoting responsible spending and strong consumer protection.

Banks and financial institutions play a critical role in this ecosystem, not only by powering transactions but by supporting long-term financial well-being. When digital payments are designed and used thoughtfully, they can help households and businesses enjoy the festive season with confidence and start the new year on a stronger financial footing.

The writer is the Retail and Business Banking Director, Absa Bank Uganda