January 14, 2021

The Central Bank of Nigeria (CBN) has issued the Framework for Quick Response (QR) Code Payments in Nigeria.
This 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.

Quick Response (QR) Codes are a kind of matrix barcode representing information presented as square grids, made up of black squares against a contrasting background, that can be scanned by the imaging device, processed and transmitted by appropriate technology.

The framework available on CBN’s website, on Thursday, stipulated that these codes can be used to present, capture and transmit payments information across payments infrastructure.

The technology further enables the mobile channel to facilitate payments and presents another veritable avenue for promoting electronic payments for micro and small enterprises.

According to the bank, all parties shall comply with the provisions of this framework and other relevant guidelines issued by the CBN, just as the Bank shall apply appropriate sanctions to any party that fails to comply accordingly.

“This framework provides regulatory guidance for the operation of QR Code payment services in Nigeria. It aims to ensure the adoption of appropriate QR code standards for safe and efficient payments services in Nigeria.

“The framework, therefore, stipulates; acceptable QR Code Standards for implementing QR Payments in Nigeria; interoperability of QR Payments in Nigeria; roles and Responsibilities of Participants in QR Payments in Nigeria; risk management principles for QR code Payments in Nigeria.”

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It noted that QR Code Payments in Nigeria shall be based on the EMV® QR Code Specification for Payment Systems and the Bank 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).

The framework recognises participants in QR Code Payment in Nigeria to include: Merchants, Customers, Issuers (Banks, MMOs and Other Financial Institutions), Acquirers (Banks, MMOs and Other Financial Institutions) and Payments Service Providers.

It stated that all issuers, acquirers, switches, processors and other participants in QR payments in Nigeria shall ensure full interoperability of QR Code Schemes in Nigeria.

“Issuers and acquirers shall clearly define risk management policy and guidelines for the operation of the QR Code Scheme. The risk management guidelines shall include the detailed stipulation of the responsibilities of all participants for managing risk;

“QR Codes shall, at a minimum, be encrypted (AES) and/or signed; QR Codes Payments applications, updates and patches shall be duly certified by the Payment Terminal Service Aggregator (PTSA).

“Issuers and Acquirers, shall agree on minimum due to diligence guidance for merchant onboarding without prejudice to the KYC/AML requirements of the Bank; Issuers and Acquirers shall ensure that only PTSA certified QR Code shall be utilised;

“Issuers and Acquirers shall ensure behavioural monitoring and fraud management systems are implemented to prevent, detect and mitigate fraud and money laundering; Issuers shall have the overall responsibilities for managing fraud risk and shall coordinate all participants towards managing fraud in its scheme,” the document read in part.


CBN issues framework for quick response code payments in Nigeria

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