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All About the New QR Payment Method by CBK and How it Works
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All About the New QR Payment Method by CBK and How it Works


The CBK recently launched the Kenya Quick Response Code Standard to increase the usage of digital payments in Kenya. 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 (Visa and Mastercard), among others, and is meant to revolutionize digital payments.

Historically, payment providers have struggled to work together to make their products interoperable. This has hindered the growth of digital and cashless payments. 

The main purpose of the KE-QR Code Standard 2023 is to increase interoperability among different payment service providers. It will allow merchants to receive payments from multiple channels by letting customers use any participating payment method to scan a universal QR Code.

This new standard is a significant step in cashless payments in Kenya and will make it easier and more convenient for people to pay for goods and services.

So what is the KE-QR Code Standard 2023, and how does it work? Here is everything your need to know.

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What is a QR Code?

A Quick Response code (QR code) is a type of two-dimensional barcode used to store or link information and can easily be read by digital devices such as smartphones. They typically comprise a series of black and white pixels in a square-shaped grid.

To access information stored in a QR code, you must scan it using your smartphone camera, an app, or other devices with a QR code reader. Once scanned, the device will perform an action as the QR code specifies. These actions include opening a website/app, making a phone call, opening a map, and authorising payment.

QR Code Payment Systems (KE-QR Code Standard 2023) and How They Work

QR code payment is a contactless payment method where a transaction is performed by scanning a QR code from a mobile app. 

Previously, you had to manually input different payment codes and numbers, which created friction and cumbersome payment processes prone to errors. QR Codes are intended to streamline digital payments by making them easy, fast, and convenient.

The Kenya Quick Response Code Standard 2023 (KE-QR Code Standard 2023) will guide how Payment Service Providers and banks (institutions) that the CBK regulates will issue QR Codes to consumers and businesses that accept digital payments. 

QR code payment functions just like any other QR code, but instead of leading you to information, it takes you to a web payment form to authorise payments. It's like a point-of-sale (POS) terminal where you scan the code with your smartphone and make the payment instantly. 

One notable advantage is that you retain control throughout the entire contactless process, from initiating the payment to confirming the transaction amount and authorising the payment. You do not have to hand over your payment device to a cashier or swipe a card. 

For merchants, QR code payments offer a convenient method to accept payments without requiring additional hardware. All they have to do is set up QR code payments on their smartphone, computer, or QR Reader supported POS, generate a code, and they’ll be set to start processing transactions. 

To accept QR code payments, merchants will present the code to the customer, who will scan it to initiate the transaction. Depending on the type of QR code, it will be displayed conspicuously via a sticker or on a POS device.

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Types of QR Codes in Kenya

Payment QR codes can be static or dynamic. The main difference between the two is the functions they perform and the payment details they contain. Whereas dynamic QR codes have more transactional data and can be modified and updated in real-time, static QR codes contain fixed information that cannot be changed once the code is generated.

Static QR Code

A static QR Code always contains the same information and is intended to be used for multiple transactions. They will be presented as a printed code, laminated, and fixed to the merchant’s wall, window, or elsewhere; customers can readily access it. 

You can scan the QR code using a mobile application to initiate the payment. Static QR codes contain only the essential merchant’s information that will be displayed on your mobile device for verification: That information includes:

  • Merchant Name
  • Merchant Location information
  • Payment Credentials (e.g., till number, pay bill number, etc.)
  • Industry Segment
  • Merchant Category Code
  • Country Code

Typically, in a static QR code, the transactional value will be absent, and you will be prompted to enter the payment amount after you have scanned the code. 

In some instances, a merchant will have a static QR code containing a static value if you are paying for a single service with a fixed amount, such as an admission ticket to a concert or museum, a parking fee, or your monthly gym subscription.

Dynamic QR Code

A dynamic QR code refers to the case when a different code is explicitly generated for each payment request. This allows the QR code to be personalised to the payment request, and it will include the merchant’s information available in static QR codes and additional data, such as: 

  • Invoice Reference 
  • Transaction Amount 

A dynamic QR code typically has an expiry time and is only valid for one payment. There is a customer convenience element of not having to type in the payment amount; just scan, view the details, and enter PIN/scan biometric to approve the payment.

Dynamic QR codes are often used for applications that require real-time updates, such as at a supermarket or hotel. At a retail outlet, it will require the merchant to own a smartphone or POS device capable of showing the newly generated QR for the particular transaction. 

Dynamic QR codes with a long expiry may be printed on electricity, gas, and other utility bills to make payments to the respective collection account. 

How to Pay Via the QR Code in Kenya

All transactions using the KE-QR Code Standard 2023 will be initiated by the consumer by scanning the Code presented by the merchant. The Standard provides a unified mechanism for presenting and capturing merchant information to facilitate faster and more convenient consumer payments. 

The Code will be presented by the merchant and scanned by the consumer. The Code will not contain customer personal information (e.g., mobile numbers, identity numbers & email addresses) but will fully represent merchant information, transactional values, and additional data not being exchanged by default.

You will need a smartphone and an app provided by your payment service provider (PSP) to make a QR payment. For instance, if you are paying with money in your mobile money wallet, you will need an app from your network provider. If you are paying from your bank account, you must have an app provided by your bank. 

To make a QR Payment, you need to follow the following steps: 

  • You will be given the option to pay using QR at a merchant point of sale. The QR code at the merchant store will be displayed prominently via a sticker or on a POS device. 
  • You will then scan the QR Code using the smartphone applications provided by your PSP and check to confirm the merchant business name and transaction value before accepting the payment request.
  • If the transaction value is not specified in the merchant QR Code, you will input the required amount.
  • Once all the necessary payment details are captured, you will initiate the payment by authenticating the transaction via their normal payment service provider process, for example, by entering your PIN. 
  • Your payment service provider will initiate the payment transaction to the merchant’s payment service provider using existing payment transaction rails; 
  • Upon payment completion, your PSP will notify you via SMS or In-App notification.

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Benefits of QR Code Payments 

The KE-QR Code Standard aims to enhance Kenya's global leadership in digital payments, ensuring QR code payments' safety, reliability, and wide acceptance. This payment method will provide an additional payment initiation method in Kenya, increasing usability and growth of consumer adoption of digital payments and promoting interoperability among different payment service provider platforms. 

But how will it benefit you, the end consumers?

  • Easy and Time-Saving - QR codes eliminate the need to insert merchant information such as pay bills and till numbers. This simplifies the process of initiating and making payment transactions.
  • Secure and Private - QR codes are expected to increase the safety and security of payment transactions by direct data capture that avoids payment mistakes. Secondly, merchants won’t ask for personal information like phone or ID numbers.
  • Interoperability - The KE-QR Code Standard will promote a collaborative payment system. Merchants will display one QR code that will support all PSPs. You can pay directly from your bank account or mobile money account.

While QR codes offer many benefits to consumers, they can lock out most people who are not tech savvy, lack an internet connection, or don't have smartphones with cameras that can scan the code. This creates a digital divide, limiting the accessibility and usability of QR code payments for a significant portion of the population. For instance, USSD-only customers are not served as QR payments require customers to have a smartphone. 

The Risks Associated With QR Payments 

According to the Central Bank of Kenya, QR code payments pose several risks, such as:

  • Phishing attacks: These attacks can occur in many ways, with consumers getting tricked into scanning the wrong QR code, which poses a preeminent threat during the payment journey. A malicious attacker could trick a user into opening a page or completing a payment to the wrong recipient without the actual user knowing they are being attacked.
  • Connectivity issues: Network connectivity is required to make QR code payments. Majority of users would be challenged to complete payments using QR Codes for cases where connectivity is low or poor, thus causing a poor checkout experience. 
  • Poor customer journey experience: Due to different industry players offering diverse QR Code solutions, they create varying customer journey experiences for scanning QR Codes. Consequently, most QR code providers complicate the overall scanning and checkout experiences by adding complexity.

To mitigate these risks, the CBK and payment service providers plan to implement measures such as consumer training, improved payment connectivity, increased QR code acceptance, improved QR code security, and transparent data handling policies will be implemented.

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While QR Payments are new in the country, they are widely used worldwide. Kenya now joins the Philippines, Jordan, South Africa, Singapore, Bahrain, Saudi Arabia, India, and China, among others, who have implemented the standardized approach to QR code payment.

CBK says that implementing the KE-QR Code Standard will use a phased approach. The KE-QR Code Standard 2023 aligns with the National Payments Strategy 2022-2025  objectives, including trust, security, usefulness, choice, and innovation. 

The standard will be launched after payment service providers have reviewed the KE-QR Code standard document and understand it, updated their QR Code to comply with the Standard, and committed to the QR Code implementation to ensure seamless and customer-centric interoperability has been achieved.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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