Kenya boosts payments interoperability with state-backed QR codes

By Victor MUJIDU

The Central Bank of Kenya (CBK) has announced 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.

The Kenyan Universal Payment system will guide how Payment Service Providers and banks (institutions) that are regulated by the CBK issue Quick Response (QR) Codes to consumers and businesses that accept digital payments.

The outgoing CBK Governor Dr. Patrick Njoroge said that the initiative will be easy fast, secure, and seamless modes of payment that support financial inclusion and innovation that benefit Kenyan merchants and consumers.

According to Dr. Njoroge, the revolution in the world of digital payment will help Kenyans to have a streamlined environment in the digital payment ecosystem.

“We as Central Bank of Kenya scheduling of this vision, have been working steadfastly over the years to provide an enabling environment that supports the expansion of the retail payments ecosystem,” Mr. Njoroge said.

“This has happened with the entry of new players for instance the payment service providers, and digital credit lenders, and also with innovations that have allowed digital payment platforms to be embedded into all sectors of our economy and our everyday lives,” he added.

The Standard, which is based on the EMVCo QR Code Specification, has been developed through collaboration between CBK, Payment Service Providers, banks, and card schemes, among others.

“The QR code standard that we’re launching today is the outcome of a collaborative process that brought together the retail payment industries and to me this is a milestone in more than one respect and in particular it’s a milestone due to the collaboration that has taken place,” the CBK Governor said.

QR Codes are machine-readable codes consisting of an array of black and white squares containing information that provide an alternative option for initiating and accepting digital payments made by customers at various points of sale, such as supermarkets, general stores, and shops, among other outlets.

The implementation of the Standard, and use of standardized QR Code-enabled payments, will bring practical benefits to businesses and customers. Customers will now be able to make digital payments in an easy, fast, convenient, and secure manner using QR.

Previously, customers had to manually input different payment codes and numbers, hence creating friction and cumbersome payment processes that are prone to errors.

It will also promote inclusion by enabling institutions of various sizes and customer focus to increase the adoption of digital payments. In the long term, the use of standardized QR Codes will facilitate the launch of innovative products and deepen the benefits already enjoyed by customers making payments across various institutions and mobile money networks (interoperability).

Issuance of the Standard marks an important step in the implementation of the National Payments Strategy 2022 – 2025. The Strategy was launched in February 2022 to, among other things, support the adoption of key standards and align Kenya’s National Payment System to global best practices.

With the launch of the QR Standard, Kenya is joining other leading markets that have implemented the standardized approach to issuing QR codes for facilitating payments.

These countries include the 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 the requirements set out in the Standard and increase customer awareness.