Home Banking Fresh Concerns Emerge in Uganda’s Financial Sector with Pivot Payments Ltd Suspension

Fresh Concerns Emerge in Uganda’s Financial Sector with Pivot Payments Ltd Suspension

Pivot Payments Limited
PHOTO: Pivot Payments Limited Website

The recent suspension of Pivot Payments Ltd by the Bank of Uganda (BOU) has sparked fresh regulatory concerns within Uganda’s financial sector. On Thursday, the Central Bank took the decision to suspend the company’s operations, citing Section 13 of the National Payment Systems Act, 2020.

Effective February 29, 2024, BOU suspended the licenses of Pivot Payments Ltd as both a Payment Service Provider and a Payment Systems Operator. Deputy Governor Michael Atingi-Ego stated that the company’s business conduct was deemed detrimental to public interests and posed risks to financial system stability.

In response, BOU urged existing wallet holders of Pivot Payments Ltd to visit the company’s premises for wallet balance verification and Know Your Customer (KYC) information confirmation. This move aims to safeguard the interests of the public and ensure transparency in financial transactions.

Following the regulatory announcement, Pivot Payments Ltd issued an apology to its customers and stakeholders, acknowledging the issues at hand and pledging swift resolution. The company assured its commitment to resolving the matter promptly in collaboration with regulators and relevant stakeholders.

Louis Namwanja Kizito of Pentagon Advocates criticized BOU’s decision to suspend Pivot’s operations, labeling it as old-fashioned and urging for a more forward-thinking regulatory approach. Kizito emphasized the importance of nurturing the fast-growing Fintech industry and advocated for regulators to adapt to the evolving landscape.

Silva Kayondo of Ortus Advocates echoed similar sentiments, expressing concerns over the regulatory challenges revealed by the developments at Pivot Payments Ltd. Kayondo emphasized the need for careful consideration of public policy and regulatory frameworks to support Uganda’s fintech ecosystem.

Pivot Payments Ltd, founded by Shamirah Kimbugwe, had ambitious plans to revolutionize digital banking in Uganda. With operations across multiple African countries and a substantial user base, the company aimed to lead the transition towards purely digital banking solutions.