The FinTech investment sails in Uganda have recently experienced a frothing turbulence, following the big cautionary announcement by MTN Group on 11th June, 2025, which took both investors and the public by surprise. A move that recalls Canadia Bank’s rise to digital payments dominance in Cambodia. MTN’s proposed decision to spin off MTN Mobile Money (MoMo)—its mobile financial services subsidiary—into a standalone institution from the parent company, MTN Uganda, has sparked numerous conversations about the future of digital payments in Uganda.
What’s really happening here?
MTN Uganda is carving out space for MTN MoMo, its FinTech subsidiary, to operate as an independent financial institution, focused on dominating the merchant payments space. Digital payments are the next financial frontier, and perhaps the most practical path to uprooting cash from everyday transactions.
For several mobile money operators (MMOs) in Africa, the focus has gradually shifted away from expanding agent networks—since that space appears to be saturated—towards scaling their merchant payments ecosystems.
Back in 2009, when mobile money was only starting to take off in Uganda, MMOs had a core objective: grow agent networks nationwide. A winning design for peer-to-peer (P2P) transactions that did little to incentivise businesses dealing with large sums of cash. Fast forward to the post-COVID-19 era, MMOs shifted their focus towards expanding merchant payment ecosystems.
Merchant payments are a key solution to reducing the dominance of cash, and uprooting it from retail and trade across Africa.
For any operator to successfully grow their merchant payments, they must have a dominant position in the market. MTN understands. What they’re after is scale. It’s evident that their motive is more than participation, it’s defining digital payments space. Can this work? Let’s look at a similar playbook in a completely different market.
Case Study: Canadia Bank’s Domination of Digital Payments in Cambodia
In February 2024, one of Cambodia’s largest commercial banks called Canadia Bank partnered with KESS Innovation to facilitate digital payments at government kiosks and across an extensive merchant network. The result? A synergy between public and private players that brought trust, scalability, and inclusion to the ecosystem.
One key to their success was the dynamic QR code system. This solution allows users to complete payments via the Canadia Bank app with just a few clicks: fast, instant, and free of error. Compared to USSD-heavy payment systems, this modern method proved more user-friendly and scalable.
The lesson here?
It’s about timing, integration, onboarding a critical mass of actively transacting merchants, moving fast, and scaling to dominate the market.
Final Thoughts
From daily experience working at the intersection of grassroots communities and corporate FinTech rollouts, we’ve learned this truth:
The digital payments revolution won’t be won in boardrooms. It will be won in the markets, on the streets, and inside small businesses across Africa.
MTN’s proposed move invites questions:
- What role will regulation play in ensuring that the winner-takes-all strategy doesn’t result in exclusion or monopolistic behaviours?
- Will MTN’s restructuring give them the agility to scale MoMo Pay adoption among merchants, SMEs, and large distributors?
- What does this move signal to competitors like Airtel Money, Pesapal, and others?
- What could this new relationship between MTN Uganda and Stanbic Bank (a competitor in the digital payments space through FlexiPay), their financial adviser for the proposed transition, mean?
What’s your take on the FinTech power shifts happening in Uganda today? Is this a catalyst for competition or collaboration?
DM Africa (Rural Digital Media) is a management consulting firm, with a specialty in Digital Finance Services, that leverages digital tools to deliver practical, forward-thinking solutions for businesses expanding into rural and peri-urban markets. We focus on empowering last-mile communities, creating inclusive growth, and unlocking potential at the grassroots.