Cheque Transactions Drop by 3.6% as BoU Pushes for More Digital Payments As cheque use declines, Uganda’s financial system accelerates its transition toward safer, faster digital payment methods.

Payments through cheques in Uganda’s financial eco-system continues to decline as Bank of Uganda (BoU) intensifies efforts to promote digital and electronic payments.

Latest data from the central bank shows that both volume and value of cheque transactions have dropped, reflecting a steady shift toward electronic funds transfers and mobile-based banking solutions.

BoU data indicates that cheque transaction values fell by 3.6%, from UGX 4.8 trillion in the year to June 2024 to UGX 4.62 trillion in the same period in 2025.

Similarly, the volume of cheques declined by 3.9%, from 1.05 million to 1.01 million transactions over the same period.

The trend, the central Bank notes, is consistent with policy reforms introduced in January 2022 that seek to encourage the use of electronic payments.

Policy shift: encouraging e-payments

Under the new policy, the maximum value for interbank cheques was capped at UGX 10 million, down from UGX 20 million previously.

The limits were also lowered for other major currencies such as the $2,750, €2,250, £2,400, and KES 300,000, which took effect on January 15, 2022.

The move was part of Bank of Uganda’s broader strategy to modernize the payment system, reduce manual transactions, and enhance the efficiency and traceability of financial transfers.

However, BoU noted then that the limits were not applicable to cheque payments within the same bank or to over counter withdrawals, but only to interbank transactions where clearing is required.

“The Bank of Uganda continues to encourage the use of alternative electronic payment systems such as the Real-Time Gross Settlement System (RTGS), Electronic Funds Transfer (EFT), and mobile money,” the report reads in part.

Bank Uganda also noted that it will continue to monitor cheque usage and may consider lowering the caps further if the shift toward e-payments continues as expected.

EFT transactions rise

However , as the use of cheque declines, electronic fund transfers (EFTs) recorded an 8.7% increase in transaction value, rising from UGX 59.4 trillion to UGX 64.6 trillion in the 12 months to June 2025.

This growth signals a clear migration from paper-based to electronic payment channels, which offer greater convenience, and enhanced security.

Overall, cheques accounted for only 6.2% of total transaction volume and 5.6% of total transaction value in the period under review.

This compares to 6.9% and 6.75%, respectively, in June 2024.

Cheque fraud

While the decline in cheque usage aligns with digital transformation goals, it also comes amid rising cases of cheque-related fraud, a growing concern within Uganda’s banking industry.

Uganda Bankers Association (UBA) recently noted that cheque fraud has become the fastest-growing financial crime, exploiting technological advancements and weak document handling practices.

Common types of cheque fraud include counterfeit, forged, altered, or cheques drawn on closed accounts.

Fraudsters often use stolen or forged cheques, counterfeit identification, or intercept genuine cheques and alter payee details and amounts.

UBA noted that counterfeit and altered cheques have become more sophisticated, aided by modern color-copying and publishing technologies.

In some cases, criminals obtain unused cheque leaves from stolen bank archives or intercept government and company payments during transfer.

The BoU’s push toward electronic payments aims to reduce such vulnerabilities by minimizing manual transactions that rely on physical instruments.

However, the transition is gradual. Many businesses still depend on cheques for large-value payments due to habit, record-keeping needs, or limited access to digital platforms.

BoU’s challenge is to ensure that the financial system remains both efficient and inclusive as it moves toward full digitalization.