CBN issues guidelines for QR codes operation in Nigeria
By Charles Abuede
- Says QR code payments shall be based on EMV code specifications
- Aims to deepen efficiency in payments services
The Central Bank of Nigeria (CBN) has issued the guiding framework for the interoperability of Quick Response (QR) code payments in Nigeria, stating that its implementation in Nigeria shall be based on the mode specifications presented by the merchant.
The guiding framework is contained in a circular issued on Wednesday and published on its website.
The CBN stated that the issuance of the guidelines is in furtherance of its mandates to ensure the safety and stability of the Nigerian financial system, promote the use and adoption of electronic payments and foster innovation in the payments system. The bank also disclosed that it aims to ensure the adoption of appropriate QR code standards for safe and efficient payments services in Nigeria.
On the specified operations of the framework, it stipulates that QR Code Payments in Nigeria shall be based on the Europay, MasterCard, and Visa (EMV) QR Code Specification for Payment Systems; that the CBN may also approve the implementation of any other QR Code Standard, provided it meets the prescribed security requirements within the framework, demonstrates interoperability with other existing implementation in the industry and/or cost benefits to end-users (merchants and customers); and shall support account, wallet, card and token-based QR Code Operations.
The apex bank also disclosed in the framework that in Nigeria, participants in QR Code payment shall include the payment service providers, issuers and acquirers which is comprised of the banks, mobile money operators (MMOs) and other financial institutions, the merchants, as well as the customers.
Furthermore, CBN demands that all merchants participating in the payment system should use and display only the approved QR codes in Nigeria and also comply with service agreements executed with the acquirer; the issuers shall deploy necessary updates and patches on its QR Code Payment application and ensure the customer is unable to initiate a transaction through the older version of the application where the customer fails to apply the update within 14 days of the availability of the update or patch; while other Payments Service Providers (Switches & PSSPs) shall facilitate the interoperability of QR Code Payments for all issuers and acquirers.
Why does this matter?
Despite the fact that the EMV specifications and application can decrease the chance of fraud and invalidate counterfeit cards for card-present transactions at PoS terminals, these EMVs are limited in protecting card-not-present transactions. This is why the CBN is enhancing the use of QR codes to further improve the efficient adoption of the payment technology in the Nigerian financial system.