Local Banks are beginning to Understand Values of Verve – KAWUMI, InterSwitch Country Manager, Uganda

Interswitch is a pan African payments services provider. The company was founded in 2002 in Nigeria and has since grown to have full operations in four sub-Saharan African countries including Nigeria, Uganda, and National Switch in the Gambia, and with full operation in Kenya. They also have customers in Rwanda, and Tanzania among others. With strong partnerships with international card schemes such as MasterCard, Visa, American Express and Discover, the company focuses on developing solutions that are relevant to Africa. PETER CHARLES KAWUMI, InterSwitch country general manager in Uganda, in an interview, shares their role in facilitating payment system in Uganda. Below are the excerpts:-

Can you give us a brief about InterSwitch services in Uganda?

Interswitch in Uganda, partners with over 20 financial institutions such as commercial banks and credit institutions, micro-finance deposit taking institutions for several reasons. We offer switching services through the ATM of 20 financial institutions. If you are an account holder for Opportunity Bank, in the past, you would only be able to get money only through its ATM. Now, an account holder of Centenary Bank can withdrawal money from the ATM of Opportunity or dfcu Bank. Any institution that is a member of InterSwitch can serve you to cash out, easing access to peoples’ salaries and wages. This has been on for about 10 years. We introduced the Verve card scheme because over 90 per cent of transactions in Africa are in Africa. Through Verve card we enable them to transact.

Which other services do you offer or do in Uganda?

About half way through our operations in Uganda, we realised that people wanted easier ways of paying their bills. So, today we are working with multiple bill payment systems such as for Umeme, Dstv, Go Tv, Star Times, Internet service providers. This means that at any of our over 2,000 agent locations in the country one can pay their bills. We work through agents to support local businesses. So, these agents are small businesses that would like to earn some money through commission for every payment made. The number of agents is steadily growing and anyone can offer these services through point of sale devices or for anyone who owns a smartphone can become your business.

Recently, we have partnered with Stanbic and banks on agency banking to extend their services to local businesses to their customers. This is working well because it has eased their transactions like paying school fees and bills.

What is the reception of InterSwitch services?

Initially, it was difficult to convince especially the bigger banks that a local player could do this kind of work. Today, we are the local company that has the competence and experience to provide some of these services. Our team responds to the needs of our primary customers but also our secondary customers.

For the last 10 years you’ve been operating in Uganda, how has the volume of your transactions grown?

The growth of our transactions has been healthy. In the initial two years, we were doing about 5,000 transactions per month. This was because there were fewer members on the switch and we were only offering ATM switching at the time. Today, we are doing north of Shs4 million transactions per month. In terms on liquid cash, this translates into Shs6 billion per month and Shs72 billion annually. This has been augmented by the multiple services we added on like agency banking and quick teller payment services among others.

In the next two to three years, we hope to do more than Shs10 million transactions per month.

We see several banks subscribing to Visa services which are international services yet you have your Verve cards. Is this your competition?

Interestingly, I don’t see Visa card as a competitor but rather a potential partner. Today, one of the services we offer is transactional processing for Visa and MasterCard. Are they competition? It’s a very healthy competition. There are some customers in this market that would very clearly say they want Visa cards because they travel for work and trade.

However, majority of them may not need a Visa Card scheme but instead a local card scheme like Verve. I think there is a role for financial service providers to educate their customers on who needs what so that they (customers) get the best and cost efficient price. Has this affected our business? Yes, because some banks are using Visa and ‘No’ because some banks have realised the value of having the local card scheme.


Some customers complain that InterSwitch services are costly. Is this true?

There are three costs when you use ATM through InterSwitch. When an Opportunity bank customer does a transaction on an Opportunity ATM, this is called an On-Us transaction. Here the banks often charge very low.

Then, there two varying transactions using some banks on the switch. If a customer of Finance Trust bank goes to the ATM of dfcu because Finance Trust bank is not on Visa and Dfcu is on Visa and both the two banks are on the local switch –this customer will be charged Shs1,500 to transact. This amount will be shared by three parties.

Third, there other banks that are only on Visa, for example, if a Visa card holder goes to Standard Chartered ATM, this will not go through InterSwitch but Visa, this is significantly expensive and I cannot comment further.

What challenges do you encounter in executing your work as InterSwitch?

Although they are trying their best, Bank of Uganda has allowed innovation to move faster than regulation. Recently, they are catching up. We have also heard positive ‘noise’ that the national payment system law will give us an opportunity to do much more.

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The second challenge is the low uptake of digital services. Cash is still king. We would like to see some key sectors like the health care, education, transportation – accelerate their adoption technology for payments. Much as there has been significant progress, we still have challenges around power, access to connectivity and the general ability of people to access what we consider basic services. Yes, we are excited the telecoms are working in-tandem with Uganda Communications Commission to ensure this is covered but there is still some work to do.

How have you pushed the financial inclusion agenda in Uganda?

Since we now have the rails into multiple financial institutions, we possess very key pieces of real estate in the financial sector in Uganda. Most recently, we have been working with Stanbic Bank through our Verve cards to facilitate payments to the low-income population.

We started with refugees in Western Uganda and this is on a pilot basis. In the past, refugees used to receive cash which would go missing or become expensive to deliver but what we have learnt is that this can be done cheaply through innovations like Verve. We expect this will pick up. We have also seen very many other areas where a similar approach will be used like the labour intensive payments done by the Ministry of Works in their operations in rural areas payment of farmers is the other area which we can exploit.

Who is Peter Charles Kawumi?

He is the country general manager of InterSwitch.