BoU Report: Cash Still Rules, but Digital Payments Are Catching Up Uganda’s economy still runs on cash, but digital payments are quietly transforming how money moves.

Despite the steady rise of mobile money, fintechs, and online banking, cash continues to dominate Uganda’s payment landscape. 

Bank of Uganda (BoU), in its latest currency and payment systems report, reveals that while digital channels are growing steadily, the Ugandan economy remains deeply reliant on physical currency for most day-to-day transactions.

However, behind the continued dominance of cash lies a quiet but important shift; digital payments are steadily gaining traction, reflecting changing consumer habits, improved technology, and growing financial inclusion.

Cash circulation keeps rising

During the 2024/25 financial year, total currency in circulation increased by 9%,, from UGX 8.21 trillion to UGX 8.98 trillion. 

The value of banknotes rose by 10% to UGX 763 billion, while coins increased by 4% to UGX 9 billion.

BoU attributed the rise to higher withdrawals than deposits, indicating that cash is still the main medium of exchange for many businesses and households. 

Although both inflows and outflows of cash declined by 5%, the year still recorded a net outflow of UGX 771 billion, a 12% drop from UGX 878 billion in 2023/24.

The central bank noted that the slower movement of currency between banks reflected greater interbank collaboration and currency recycling, meaning that commercial banks reused and redistributed cash more efficiently instead of constantly drawing new stock from BoU.

The Central Bank expects this strong demand for cash to continue in 2025/26, supported by a projected 7 % growth in GDP. 

Uganda’s economy is expanding, driven by rising household consumption, infrastructure projects, and renewed investment confidence. 

These activities typically push up the demand for cash, especially in sectors like construction, agriculture, and retail trade.

BoU said it is working closely with commercial banks to improve cash handling and processing efficiency, ensuring the availability of clean and fit currency to support the economy.

Mobile banking leads the digital charge

While cash remains king, digital payment platforms are increasingly showing their strength. 

Among them, mobile banking emerged as the fastest-growing channel during the financial year.

The number of active mobile banking users increased by 6.5%, rising from 1.94 million in June 2024 to 2.1 million in June 2025. 

The growth was accompanied by a 20.9% jump in transaction volumes, which rose from 27.9 million to 33.7 million transactions. 

More importantly, the value of transactions increased by 39.4%, climbing from UGX 11.1 trillion to UGX 15.5 trillion.

The surge demonstrates how mobile banking continues to reshape how Ugandans access and manage their finances. 

For many users, mobile platforms bridge the gap between traditional banking and fintech. 

Customers can transfer funds, pay bills, and check balances on their phones without visiting a branch. 

It remains an option that has become increasingly popular among urban professionals and small businesses.

Mobile banking’s success lies in its simplicity and accessibility that even without high-end smartphones, many Ugandans can perform transactions using USSD codes, making mobile banking an essential tool in advancing financial inclusion.

Payment cards show steady improvement

Uganda’s payment card usage also showed positive signs of growth, although the number of active cards slightly declined  by 5.1%, from 3.8 million to 3.6 million between June 2024 and June 2025. However, this decline did not affect card usage. 

Debit card transaction volumes rose by 16.5%, from 10.8 million to 12.6 million transactions, while the value of transactions increased by 10.1%, from UGX 2.2 trillion to UGX 2.4 trillion.

Credit card usage, though still limited to a small segment of Uganda’s banking population, grew modestly. 

The number of active credit cards increased by 6.7%, from 9,569 to 10,213, while the value of credit card transactions rose by 9.6% to  reach UGX 126.7 billion.

This data suggests that card-based payments are becoming more embedded in urban and corporate banking behavior, especially for online purchases, business travel, and hotel payments. 

While cash remains the preferred choice for daily shopping and small transactions, debit and credit cards are gradually expanding their presence among middle- and high-income users.

Internet banking slows amid cybersecurity concerns

Internet banking, however, experienced a slowdown, with the number of active users dropping by 6.6%, from 0.96 million in June 2024 to 0.9 million in June 2025. 

Transaction volumes fell by 19.5%t, from 9.7 million to 7.84 million, while transaction values declined slightly by 3.4% , from UGX 117.9 trillion to UGX 113.9 trillion.

According to the Central Bank, this decline reflected growing user caution over cyber risks and online fraud. 

BoU noted that it is working with regulated financial service providers to strengthen cyber resilience across the financial sector and restore customer confidence in digital banking security.

The latest data paints a picture of a dual payment ecosystem taking root in Uganda. On one hand, cash remains indispensable deeply woven into cultural and economic habits, especially in rural areas and informal trade. 

On the other, digital platforms are steadily expanding, supported by the country’s growing mobile penetration and fintech innovation.

The shift, though gradual, is meaningful. Mobile and card-based transactions are offering Ugandans faster, safer, and more convenient alternatives to cash, while also promoting formalization of the economy. 

BoU’s report concludes that while cash will continue to dominate in the short term, digital platforms are laying the groundwork for the future of payments.

The challenge for regulators and financial institutions will be to accelerate innovation while protecting users from risks.

“While digital platforms are the future,” the report notes, “cash remains the present reality for most Ugandans.”

And that reality tells a story of progress, a nation where cash and digital transactions no longer compete, but together drive the heartbeat of Uganda’s growing economy.