Why transactions via QR Codes are set to go up in Kenya

In today’s marketplace, Quick Response (QR) codes are a common sight, showing up on everything from simple product packaging to roadside billboards and even menus in estate restaurants.

Increasingly, the convenience of accepting payments through a quick code scan is luring more customers and business owners, and regulators such as the Central Bank of Kenya.

The QR code system allows businesses to take payments without having to spend money on pricey new equipment deployed by various service providers.

With the need for quick and secure digital payment methods becoming even more urgent as e-commerce and online shopping takes root, globally QR codes are increasingly becoming a critical technology.

It was perhaps in view of these inherent needs and benefits that the Central Bank has announced the issuance and rollout of the Kenya Quick Response Code Standard 2023, a platform that could see the number of customers and businesses using QR Codes to settle payments in the country rise significantly.

The banking industry regulator said the new standard will guide how Payment Service Providers and banks (institutions) that are regulated by the CBK will issue QR Codes to consumers and businesses that accept digital payments.

“It takes a very long time to complete our transactions. It needs to be reduced. Actually, if you think of a transaction, it should be something less than four seconds to complete,” CBK Governor Patrick Njoroge said at the launch of the new standard in Nairobi.

Simplicity and security

QR Codes are machine-readable code consisting of a set 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.

By unveiling the standard, CBK seeks to ride on the simplicity and security that QR code payments to tap into the fast-expanding area of digital payments, which is largely driven by the rising use of smartphones, and e-commerce tools.

The implementation of the Standard, and use of standardized QR Code-enabled payments, will bring practical benefits to businesses and customers.

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Customers will now be able to make digital payments in an easy, fast, convenient, and secure manner using QR.

QR codes offer a variety of advantages to users. Previously, customers had to manually input different payment codes and numbers, hence creating friction and cumbersome payment processes that are prone to errors.

Currently, industry surveys show that QR codes can readily encrypted to tackle fraud and unauthorized access to customer data or business systems.

Interlinked with other e-payment methods

Further, QR code payment platforms can be interlinked with other e-payment methods, including mobile wallets, thereby offering a smooth and secure payment solutions to customers and businesses.

CBK said the Standard will also promote inclusion by enabling institutions of various sizes and customer focus to increase adoption digital payments.

In the long-term, use of standardised QR Codes will facilitate launch of innovative products and deepen the benefits already enjoyed by customers making payments across various institutions and mobile money networks (interoperability).

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

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.

Issuance of the Standard marks an important step in the implementation of the National Payments Strategy 2022-2025.

Launched in February last year, the strategy seeks to support the adoption of key standards and align Kenya’s National Payment System to global best practices.

Other markets that have implemented standardized approach to issuing QR codes to facilitate payments include the Philippines, Jordan, South Africa, Singapore, Bahrain, Saudi Arabia, India, and China.

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