On 3rd May 2023, the Central Bank of Kenya (CBK) launched the issuance of the Kenya Quick Response Code Standard 2023 (KE-QR Code Standard 2023), which will guide payment service providers and banks on how to issue Quick Response (QR) codes to customers and businesses that accept digital payments.
QR codes are a type of machine-readable code that consists of an array of black and white squares containing information. They offer an alternative option for initiating and accepting digital payments made by customers at various points of sale. The implementation of the standard and use of standardised QR code-enabled payments will bring practical benefits to businesses and customers, making digital payments easy, fast, convenient, and secure.
Prior to the issuance of KE-QR code standard 2023, customers had to manually input different payment codes and numbers, resulting in cumbersome payment processes that were prone to errors. With the QR code standard, customers can now make digital payments in an efficient and easy way, resulting in a better user experience.
The payment journey will begin with merchants who are willing to accept QR code payments being issued with a standard QR code sticker by a financial service provider to display at their premises. When a customer needs to make a payment, they will need to scan the QR code using their mobile money or bank application available on their smartphone. Once scanned, the merchant’s details such as merchant name, and in some cases, the amount to be paid. The customer will only then need to key in their PIN to effect payment.
The launched KE-QR code standard 2023 will promote inclusion by enabling merchants of all sizes to offer a quick and simple way to pay for goods and services.
It will also help to increase customer adoption of digital payments. In the long term, use of standardised QR Codes, in addition to other digital payment channels, will facilitate the development of innovative products thus deepening the benefits already enjoyed by customers.
The KE-QR code standard 2023, based on the global EMVCo QR code specification, was developed through collaboration between the CBK and the payments industry players – payment service providers, banks, card schemes, among others.
The KE-QR code standard 2023 will be rolled out in a phased approach as financial service providers align their operations to requirements set out in the standard and increase customer awareness.
Issuance of the KE-QR code standard 2023 marks an important step in the implementation of the National Payments Strategy 2022 – 2025, which 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 practice.
With the launch of the QR code standard, Kenya joins other leading markets such as the Philippines, Jordan, South Africa, Singapore, Bahrain, Saudi Arabia, India, and China that have already implemented the standardised approach to issuing QR codes for facilitating payments.
While this launch of the standard is a significant step, the true test will be the adoption of the QR code payment method in the market. Some considerations here are that (i) slightly over 50% of Kenyans do not have or use smart phones which are required to scan QR codes, thus leaving out a large segment of the population, (ii) the use of till numbers and pay bill numbers while paying from a mobile phone (both from mobile wallets and bank accounts) is already well engrained in customer behaviour so shifting customers and merchants to scanning QR codes will require a concerted effort from the industry on awareness and education, and (iii) the ability to seamlessly use the QR code from all financial service provider apps including MFIs, SACCOs and those from the east African region and beyond will need to be developed to enable full interoperability.
Despite this, the move aims to help Kenya achieve its goals of promoting financial inclusion and deepening the use of digital payments in the country. The leadership of the CBK in convening the industry to develop this standard is commendable and showcases Kenya’s continued leadership in digital payments. Looking to the future, the expectation is to see the promotion of other forms of digital payments that address the needs of small and micro enterprises (MSEs).