Somalia Central Bank has adopted the Quick Response Code standard to provide secure payment services for the transition to a cashless economy.
With the introduction of this code, Somalia will follow in Kenya’s footsteps by adopting the QR Code standard in May 2023.
The introduction of the QR code standard is the latest sign that Somalia intends to rebuild its financial services infrastructure, which by years of conflict hampered.
In 2021, CBS will introduce a national payment system to facilitate interoperability among the country’s 13 financial institutions.
In March 2023, CBS also announced that it would introduce an International Bank Account Number (IBAN) for all banks in the country, reducing operational risk for banks.
At an event marking the launch of the QR Code standard, CBS Governor Abdirahman Mohammed Abdullahi encouraged guests to continue developing solutions to digitize the country’s payments system as it seeks to rebuild after years of conflict.
When war broke out in 1991, the country’s financial institutions collapsed and depositors lost their money.
Since the war, however, the government has attempted to stimulate growth in the financial services sector, starting with the revival of CBS.
As of 2017, less than 10% of Somalis had accounts at formal financial institutions, and only 2.8% had savings at formal institutions.
However, mobile network operators are offering some relief with mobile money services, which account for two-thirds of payments made in the country.
However, given the country’s low internet and smartphone penetration, the QR code standard will not do much to promote digital payments.
Still, this proves the government’s willingness to promote digital payments in Somalia.
