- New standard to guide how Payment Service Providers and institutions regulated by the CBK issue quick response (QR) codes.
- Merchants will be able to receive payments from multiple channels such as banks or mobile wallets.
- CBK says long-term use of standardized QR codes will facilitate the launch of innovative products.
Consumers in Kenya can now make digital payments in an easy, fast, and convenient way through quick response codes. This week, the Central Bank issued the Kenya Quick Response Code Standard 2023, also shortened as KE-QR Code Standard 2023.
The service seeks to boost digital payments, which are offered by multiple financial institutions in the country. Normally, many companies use in-house payments solutions meaning customers can only use vendor-specific channels. Kenya’s financial industry regulator now wants to eliminate that friction through deployment of the new standard.
The regulator said the standard will guide how Payment Service Providers and institutions under its watch will issue QR codes to consumers and businesses that accept digital payments.
According to CBK, customers previously had to manually input different payment codes. Quite often, this method created friction since this approach is prone to errors.
“The standard will also promote inclusion by enabling institutions of various sizes and customers to focus on increasing adoption of digital payments,” said CBK.
Further, long-term use of standardized QR codes will facilitate the launch of innovative products. It will also deepen the benefits already enjoyed by customers making payments across various institutions and mobile money networks.
With the QR standard, Kenya joins leading markets that have implemented a standardized approach to issuing QR codes for facilitating payments. The countries include Philippines, Jordan, South Africa, Singapore, Bahrain, Saudi Arabia, India and China.
“The standard will be rolled out in a phased approach as these players align their operations to requirements set out in the standard and increase customer awareness,” CBK said.
Interoperability in Kenya
Kenyans have been using till and paybill numbers for an extended period when paying for goods and services. However, many banks and mobile money institutions failed to sync their platforms to make their products interoperable.
This issue has since been addressed following the CBK’s intervention, which forced Safaricom’s hand to accept other players to use its M-PESA paybill and till numbers (Airtel Money and T-Kash).
The move was welcomed by customers, but it was only limited to mobile money products.
Lender Equity attempted to fix the issue with another product named Equity One Number. Equity allows merchants to receive payments from multiple payment channels or mobile money wallets via a single till number.
Read also: Equity One Till Number takes the battle to Kenyan telcos
Equity’s approach appears to be what the CBK has largely adopted. Instead of using till numbers, however, customers will now use QR Code to settle payment.
Receive payments from multiple channels
According to the CBK governor Patrick Njoroge merchants will now be able to receive payments from multiple channels, be it banks, mobile money wallets, and other payment processors such as VISA and Mastercard.
“The Standard, which is based on the EMVCo QR Code Specification, has been developed through collaboration between the CBK, payment service providers, banks, and card schemes, among others,” a statement from the CBK reads.
This means that merchants no longer need to install multiple paybill or till number systems for their businesses. Customers, on the other hand, will enjoy a fairly direct and secure digital payment option, with better protection.
They can make payments quickly using their preferred payments channel, without having to carry cash.
“QR payments use an EMV standard for QR codes which mitigate many of the risks commonly associated with QR payments today. Consumers are in control throughout the process, from initiating the payment, confirming the transaction amount, and authorising payment. The consumer does not have to hand over their payment device to a clerk during a QR transaction,” noted CBK.
To accept QR code payments, merchants will present the code to the customer, who will scan it to initiate the transaction.
