• Payment Systems

Payment Systems

Roles

The National Payment System Department in Bank of Uganda oversees the national payment system with the objective of ensuring overall effectiveness and integrity of the payment systems in the country.

Reliance on payment systems calls for the need for them to operate in a safe and reliable way. The department therefore monitors the system carrying out routine assessments and upgrades in line with recent technological developments.

Monitoring the payment system also reduces on the risk that a problem in one part of the system (financial institution) has a damaging effect on the rest of the system causing extensive problems if payments are not made.

The bank’s role is to ensure that problems at one financial institution do not hold up the whole system.

The department also facilitates and ensures the smooth working of the Uganda National Inter-bank Settlement (UNIS) System. This is a modern payment system where the use of paper documents is totally eliminated.

Payment orders are sent electronically thus promoting efficiency and reducing the settlement cycle.

Globalization poses new challenges to the design of payment systems and the department has to keep abreast with developments in the systems both regionally and internationally.

A broad international consensus has emerged on the need to strengthen payments systems by promoting internationally accepted standards and practices for their design and operation. The department therefore in line with upholding international best practice improves or adopts efficient payments and settlement systems from time to time in order to facilitate the development of the economy.

On the whole, payment systems play an essential role in the functioning of financial markets, maintaining and promoting financial stability and facilitating the development of the economy. PSD ensures the overall effectiveness and integrity of the payment system to facilitate efficient conduct of all these dealings.