Payment Systems

Current Payment Systems

In a quest to achieve the mission of developing and maintaining efficient, reliable and secure payment systems for Uganda, the Payments and Settlements Department of Bank of Uganda is currently engaged in operating and improving the following systems.


This is the most widely spread payment system in Uganda, most especially for retail transactions. Almost 75% - 85% of retail transactions are performed with cash.
All financial institutions in Uganda support processing of cash transactions.


Currently, amounts written on cheques are limited to a maximum value of UGX 20 Million per transaction for physical exchange of instruments by commercial banks in the clearing house. The clearing house clears and settles cheque transactions on a daily basis.

Effective 1st July 2009, BoU and commercial banks implemented a local clearing of items denominated in foreign currency. Consequently, local clearing of cheques and EFTs were also capped to the equivalent of UGX 20 Million.

At present there are 23 financial institutions participating in the Bank of Uganda Clearing House with an average clearing cycle of three working days.

Electronic Clearing System (ECS)

With the implementation of telecommunication technology in the banking industry, users of payment instruments are now focusing on issues like speed, safety and convenience. To automate both cheque processing and clearing, Bank of Uganda in May 2002, implemented an Electronic Clearing System (ECS).

Banks, using SWIFT, electronically deliver data accompanying instruments to the ECS. The system then verifies the data, prepares electronic inward clearing files which are then processed by a data security system, and calculates the net position of each bank and the financial obligations owed by various banks to each other.
There are 22 financial institutions participating in the ECS system.

Electronic Funds Transfer (EFT)

To provide a variety of adequate payment instruments to the growing corporations and the corresponding increase in their transactions, Bank of Uganda in August 2003 implemented the Electronic Funds Transfer (EFT) for both credit transfers and direct debits. The EFT system provides fast, convenient, reliable and secure domestic payment and collection of funds.

Credit Transfers are predominantly being used by government and corporate customers to transfer salary payments to the employees’/beneficiary’s account. Payment instructions using this channel have picked up both in volumes and values especially after capping cheques to UGX 20 million in July 2007, resulting into government stopping issuing cheques to its suppliers and employees in favour of EFTs.

Direct debits involve periodic financial instructions from a customer to his/her bank authorizing a utility provider or any organization to collect funds from their account to settle an obligation. Since January 2007, some schools have embraced EFTs for payment of fees/tuition. EFT sensitization and technical workshops have been held in Mbarara, Kigezi, Rwenzori, Mbale and West Nile Regions.

Consequently, some parents have appreciated use of Direct Debit Agreements (DDAs) to pay fees. Utility consumers are slowly beginning to use EFTs to pay for water, electricity, telephone and insurance bills.

Commercial Banks are expected to credit a beneficiary’s account within 24 hours upon receipt of a credit transfer instruction, and to debit the payer’s account within 48 hours on receipt of a direct debit instruction confirmed against a mandate.

All the twenty two commercial banks participate in processing of EFT transactions which may be initiated by their individual or corporate customers.