Well, that has been in the works to change for a while now. In 2022, the Bank of Uganda (BoU) proposed creating a central system, a single, unified, interoperable infrastructure known as a National Payment Switch (NPS). The goal? To connect banks, mobile money operators, Fintech, and other payment service providers into one seamless network.
Of course, this sounds complex at first, and one might wonder how it would actually be beneficial. But simply put, this system would allow you to make payments across different platforms, no matter who you bank with or which mobile money operator you use. It’s designed to reduce fragmentation in Uganda’s payment ecosystem, improve efficiency, boost financial inclusion and bring down transaction costs (anyone who’s ever tried sending money across different providers knows how painful those costs can be).
Why Uganda Needs a National Payment Switch
Uganda’s digital payment ecosystem has grown tremendously over the past decade. As of 2023, over 38 million mobile money accounts were active, and mobile transactions accounted for a significant portion of Uganda’s GDP, as it is commonly used. But beneath this success lies a fractured system, with banks, Fintech, and telecom operators running isolated networks. We share some of these in Top 5 Digital Payment Systems in Uganda.
Because these systems don’t “talk” to each other efficiently, users pay extra fees when transferring money across providers. Businesses struggle with settlement delays. Fintech innovators face integration headaches. The result? Slower adoption of digital financial services and limited user trust.
The National Payment Switch aims to change this by acting as the “digital bridge” connecting all financial players under one national framework.
What Exactly Is a Payment Switch?
Let’s view the switch as one central digital highway, a road that allows every financial transaction, whether from Airtel Money to MTN, or from Stanbic to Centenary Bank, to use this same route to reach its destination securely and instantly.
What’s happening right now is that each provider is building its own private, separate road, and for others to join in. Well, that’s where the extra costs come in.
For perspective, sending money from MTN to another MTN or Airtel now costs the same (it used to be different), but transferring to the same bank account still costs differently on Airtel and MTN.
Likewise, transferring money within the same bank, say, from one Stanbic account to another, always costs less compared to sending funds to a different bank like Centenary or DFCU. Why? Because these platforms are not unified, they each work on separate infrastructures (roads).
These differences may seem small in isolation, but across millions of transactions every day, they add up to billions of shillings in avoidable costs, costs the National Payment Switch aims to eliminate.
The BOU’s switch aims to provide a single shared infrastructure where all players can plug in and thus reduce duplication, increase transparency, and make transactions faster and cheaper.
In many ways, Uganda’s switch will mirror models seen in Kenya’s PesaLink, Ghana’s GhIPSS, or Nigeria’s NIBSS, which have successfully enabled real-time interbank and mobile transactions.
Expected Benefits of the National Payment Switch
Reduced Transaction Costs
The interoperability will allow direct transfers across mobile money and bank platforms without routing through multiple intermediaries. That means lower fees for users and higher transaction volumes for providers.
Enhanced Financial Inclusion
By enabling smoother access across systems, unbanked and underbanked Ugandans, especially in rural areas, can transact more freely, improving access to financial services.
Improved Security and Oversight
With all transactions routed through a national switch, BoU gains real-time visibility into digital flows, strengthening anti-fraud monitoring and compliance.
Boost for Fintech Innovation
Developers and fintech startups can integrate into one open ecosystem rather than negotiating separate partnerships with each provider. This unlocks new opportunities for digital lending, e-commerce, and payments.
Faster Settlements
Transactions will move in real-time, ensuring funds reflect instantly across accounts, a major win for businesses and consumers alike.
Timeline & Current State of Uganda’s National Payment Switch
The idea for Uganda’s National Payment Switch (NPS) was first introduced by the Bank of Uganda in 2022, aiming to connect banks, mobile money operators, and Fintechs under one interoperable system.
By mid-2023, the procurement phase was in motion, with Paylogic SA selected as the preferred vendor.
However, the contract was cancelled in early 2024 due to stakeholder misalignment. The project has since been revived, with BoU working to finalise technical frameworks and stakeholder consensus.
According to recent updates, the switch is now in its final planning and integration stages, with full rollout expected by late 2025 or 2026 as part of Uganda’s broader push toward a unified digital payment ecosystem.
Challenges and Implementation Questions
While the benefits are clear, implementation won’t be without hurdles.
Integration complexity: Different institutions use varying systems and technologies that must be harmonised.
Data privacy and cybersecurity: With more systems interconnected, safeguarding user data becomes critical.
Stakeholder alignment: Banks, telecoms, and Fintechs may have competing interests. Getting everyone on board requires strong regulatory guidance and trust-building.
That said, BoU has already made significant progress, reportedly engaging stakeholders and testing system integrations in partnership with the Financial Technology Service Providers Association (FITSPA) and National Information Technology Authority (NITA-U).
If successful, the National Payment Switch could be one of the most transformative financial infrastructure projects in Uganda’s digital era. It would pave the way for a truly cashless economy, enhance cross-border payments in the East African region, and encourage greater participation from both the public and private sectors.
