The trend of purchasing goods and services online rather than in physical stores has become more prevalent in Uganda in recent years, with more and more consumers opting to purchase goods and services online rather than in-store. While the convenience of online shopping is clear, one of the biggest considerations for customers is how to make payments. In this article, we will explore the top 7 payment methods for online shopping in Uganda. These methods have been selected based on their popularity, security, and convenience for customers. We will delve into the details of each payment method, including how they work, and their pros and cons. Whether you are a first time shopper or a pro shopper, this article will provide you with all the information you need to choose the best payment method for your needs. Let’s get started!
Also read; How to Shop Online in Uganda without a Credit Card
Top Payment Methods for Online Shopping in Uganda
Whether you are using apps like Glovo for ordering lunch, shopping on local sites like Jumia, or purchasing from international platforms like Amazon or eBay, here are various payment methods available for use when shopping online in Uganda:
- Credit or Debit cards
- Mobile Money
- Cash on Delivery (COD)
- Cash
- E-wallets like PayPal
- Bank transfers
- Cryptocurrencies
1. Credit or Debit cards
In Uganda, debit cards are the most common type of ATM card, while credit cards are very rare as they are only issued to a select group of individuals such as prominent businesspeople, government officials, and civil servants. Credit and debit cards are traditional payment methods that allow users to make online payments using their card information.
To use a credit or debit card for online shopping, shoppers need to have a card and enter their card details at checkout. Credit and debit cards are accepted by most online stores, but they may not be available to everyone and may have fees or interest charges.
In Uganda, credit cards are issued by most banks such as Equity Bank, Stanbic Bank, ABSA Bank, UBA Bank, and Bank of Africa. These cards are typically made by companies such as Visa and MasterCard, although other brands such as Discover and American Express are also present in the country.
In addition to traditional credit and debit cards, Ugandans also have an option of using virtual debit cards, such as Airtel Virtual MasterCard, MTN Momo Card, and Chipper Cash Card. Virtual debit cards function in the same way as physical debit cards, with the only difference being that virtual cards are intangible while physical debit cards are tangible.
Pros of paying with credit/debit:
- Convenience and ease of use
- Wide acceptance at online stores
- Ability to track and dispute transactions through the card issuer
- Potential for rewards or cashback programs
Cons of paying with credit/debit:
- Risk of credit card fraud or identity theft
- Potential for high fees, depending on the card issuer and type of card
- Need to have and maintain a good credit score to qualify for a credit card
- Risk of overspending and going into debt with credit cards
Also read; Why you should use VPN while shopping online in Uganda
2. Mobile Money
Mobile money is a digital payment system in Uganda that allows users to make purchases and transfer funds using their mobile phone through a web interface or USSD code. Many online stores in Uganda accept mobile money payments, including Jumia, Kikuu, Kweli Shop, and Dombelo.
To use mobile money for online shopping, users need to have an active mobile money account, which can be set up through their mobile network provider. Payments can be made directly to a merchant’s mobile money number or through the store’s web interface at checkout.
Mobile money is a convenient and widely available payment option, but it is important to note that it has fees associated with transactions.
Pros of Mobile Money:
- Can be accessed through a mobile phone, eliminating the need for a computer
- Convenient and easy to use for a variety of transactions, not just online shopping
- Accessible to everyone and can work without an internet connection
- No need for a bank account or credit card
Cons of Mobile Money:
- Some online stores do not accept Mobile Money as a payment option
- Security risks and potential for fraud or scams
- Dependent on mobile network coverage and service quality
- Unreasonable transactional fees may be charged by some providers
3. Cash on Delivery (COD)
In Uganda, where online shopping is still a relatively new concept and many people are hesitant to make online payments, retailers often offer the option of cash on delivery (COD) in order to increase sales. This payment method allows shoppers to pay for their items when they are delivered, rather than paying in advance.
COD is a popular choice for those who are uncertain about online payments, have trust issues, prefer to pay in person, or do not have a credit or debit card or other digital payment methods.
To use COD, shoppers need to select this option at checkout and pay the delivery person when the items are received. Local retailers that accept COD include Jumia, Jiji, Dantty, Dombelo, and Abijax. It is important to note that COD is only accepted for local orders, while international orders typically require prepayment.
While COD is a good option for those who want to avoid the risks associated with online payment, it may not be available for all items and may take longer for delivery.
Pros of paying with Cash on Delivery:
- Great option for those with trust issues or concerns about fraud or scams
- Payment can be made in person, eliminating the need for online payment methods
- Some online stores offer discounts for COD orders
- For secondhand purchases, you can inspect the items first before paying
Cons of paying with Cash on Delivery:
- Not all items may be available for COD
- Delivery may take longer than other payment options
- Acceptance of COD may be limited to certain locations
- Not accepted on international orders
- Some retailers charge a fee for COD orders
Also read; 14 ways Jumia simplifies online shopping in Uganda
4. Cash
In Uganda, cash method for online shopping is possible through the use of shopping intermediaries or shopping assistants. Shopping intermediaries are companies or individuals that assist people who are unfamiliar with online shopping or unable to shop on their own by placing orders and arranging for delivery on their behalf.
Customers pay cash at the shopping intermediary’s office, and the intermediary assists with placing the order and arranging for delivery. This method is often used for shopping on international websites or for purchasing items from abroad. Some examples of shopping intermediaries in Uganda include GoodsExpress, 2Gule, UG Unlocked, Supaprice, Intership, Salabed, and Buy2Africa.
While this method allows for the use of cash in online shopping, it may not be as convenient or secure as other payment methods due to the need for physical exchange and the lack of security compared to digital payment methods.
Pros of paying with cash:
- No need for a bank account or credit card
- No risk of credit card fraud or identity theft
- No need to worry about account balances or overdraft fees
Cons of paying with cash:
- Limited to in-person transactions, not suitable for online purchases
- Risk of loss or theft of cash
- Lack of purchase protection or recourse if goods are not received or are defective
- No ability to track or dispute transactions
5. E-wallets like PayPal
PayPal is a widely recognized and trusted online payment platform that enables users to send and receive payments, as well as make purchases online. It offers a secure and convenient way to make transactions, allowing users to pay or send money without having to disclose their financial information.
Users can link their debit or credit card to their PayPal account and use it to make payments online. PayPal also provides buyer protection, which means that if a user makes an online purchase and does not receive the item they ordered or the item is not as described, they can file a claim with PayPal and potentially receive a refund.
Although PayPal is available in Uganda, Ugandan users are only able to use the service to make online payments or send money, but not to receive funds. As a result, many local online stores do not accept PayPal as a payment method, though most international stores do. PayPal is a great option for shopping on international websites.
Pros of paying with E-wallets:
- Easy to use and accepted by most international online stores
- Can be used for a variety of transactions, not just online shopping
- Offer additional protection for online purchases, such as PayPal’s Buyer Protection
Cons of paying with E-wallets:
- Not be accepted by most local online stores
- Require an internet enabled device to access
- Security risks, such as the possibility of unauthorized access
- Attract transactional fees
Also read; 5 Ways to Shop More Securely Online in Uganda
6. Bank transfers
Bank transfers allow customers to make payments from their bank accounts. This can be done online using an online banking account or in person at a bank branch or agent. Customers will need to login to their online banking account and authorize the transaction during checkout.
Bank transfers are a good option for large payments and banks often offer features like EFTs (electronic funds transfer) and RTGS (Real Time Gross Settlement) which allow users to transfer funds electronically between bank accounts.
However, bank transfers do not come with purchase protection, meaning that if goods are damaged or not received, the bank cannot reimburse the payment. Bank transfers also take longer to process transactions than other payment methods.
Pros of paying with Bank Transfer:
- Secure payment option
- Allows for payment from a bank account
- Can be done online or in person at a bank location
Cons of paying with Bank Transfer:
- Takes longer to process payments than other payment methods
- Attracts unreasonable fees
- Dependent on bank business hours and location accessibility if making payment in person
- Not all users have an online banking account or are comfortable using one
- No purchase protection or recourse if goods are not received or are defective
Also read; How to Shop Online Like a Pro: 10 Expert Tips
7. Cryptocurrencies
Cryptocurrencies, such as Bitcoin, are digital currencies that use cryptography for security and can be used for online payments. While no Ugandan online stores accept crypto payments yet, several international retailers, such as Newegg, JomaShop, and Overstock, do accept them.
To use cryptocurrencies for online shopping, shoppers need to have a cryptocurrency wallet and initiate a transfer to the online store.
Cryptocurrencies are a relatively new and innovative payment option, but their value can be volatile. As a result, they are only accepted by a small number of online stores.
Pros of paying with cryptocurrencies:
- Ability to make secure, decentralized payments
- Potential for lower fees compared to traditional payment methods
- Anonymity for the buyer
- Ability to make cross-border payments easily
Cons of paying with cryptocurrencies:
- Limited acceptance at online stores
- Volatility in value, leading to potential losses for the buyer
- Complexity and learning curve for new users
- Risk of fraud or scams
- Lack of purchase protection or recourse if goods are not received or are defective
Also read; Online shopping in Uganda: What you should know about the new trend
Online shopping tips for Ugandan shoppers
To have a safe online shopping experience and protect against fraud, it’s important to be cautious when making online payments, regardless of which payment option you choose. Here are some tips to help:
- Avoid making sensitive transactions, such as online shopping, while using public Wi-Fi.
- Protect your personal information and log out of your accounts when done shopping online.
- Use a strong and unique password for your online shopping accounts.
- Keep records of your transactions, including receipts and confirmation emails, in case of issues or disputes.
- Use updated antivirus software to protect against malware and other cyber threats.
- Check for reviews from other customers before making a purchase from a new online store.
- Choose a trusted payment method like COD or PayPal.
- Be wary of suspicious emails and never click on links or enter personal/financial information from unknown or untrustworthy sources.
- Ensure the website has a secure connection by looking for “https” in the URL and a padlock icon in the address bar.
To have a safe and enjoyable online shopping experience in Uganda, you can follow the above tips to protect yourself and your personal information.
Also read; How to Shop Online in Uganda: Step-by-Step Guide
Final thoughts!
In conclusion, these top 7 payment methods for online shopping in Uganda offer a range of options for consumers to choose from based on their needs and preferences. Each payment method has its own pros and cons, and it’s important for consumers to consider these carefully before making a decision. Credit/debit cards, mobile money, and e-wallets are popular choices for their convenience and wide acceptance, while bank transfers and cash on delivery offer more traditional payment options. Cryptocurrencies are a newer, more innovative payment method, but their limited acceptance and volatility in value should be taken into account. Ultimately, the best payment method for online shopping in Uganda will depend on the individual consumer’s priorities and circumstances.
