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Opinions of Thursday, 3 December 2020

Columnist: Nana Yaw Kesse, GCB Bank

Bawumia is right about novelty of Ghana’s Universal QR CODES, Dr Kobby Mensah got it wrong

Vice President, Dr Mahamudu Bawumia used the technology in Accra on Thursday, November 19 Vice President, Dr Mahamudu Bawumia used the technology in Accra on Thursday, November 19

Following the recent lecture by the Vice-President, Dr Mahamudu Bawumia in which he stated that Ghana’s recently introduced Universal QR code was the first of its kind in Africa, Dr Kobby Mensah of the University of Ghana Business School responded by claiming that the Universal QR CODE was already existent in Ghana and that other countries such as Kenya and Nigeria already had Universal QR codes and therefore Ghana is not the first.

It was easy to understand Dr Mensah’s confusion due to the similarities in nomenclature between a QR CODE payment system and a Universal QR CODE payment system.

In simple terms, the difference between a QR CODE payment system and a UNIVERSAL QR CODE payment system has to do with the introduction of universal standards of interoperability for universal QR Code payment system.

For example, Mobile Money existed before 2018 but the telcos operated in silos and there was no interoperability between them.

There was also no interoperability between mobile wallets and bank accounts. However, in 2018, mobile money interoperability was introduced, and the version introduced allowed Ghana to become the first country in Africa to introduce mobile money interoperability between bank accounts and mobile wallets in 2018.

In the same vein, Ghana’s financial services sector under the auspices of the Bank of Ghana launched Ghana’s Universal QR code solution; GhQR in March this year (2020). This was to ensure mass participation and provide avenues for cost effective acceptance of digital payments at merchant locations.

The GhQR solution puts Ghana in the same category as countries like Singapore, and India, among others who have taken lead in implementing Universal Standards for National QR Code Payments.

Such national initiatives do not exist in any country in Africa other than Ghana. In a few countries such as Nigeria and Kenya and even here in Ghana, QR code schemes based on Visa and MasterCard collaborations do exist as well as bank and Fintech based standalone QR code schemes which serve merchants and customers of those institutions only.

This is the source of Dr Mensah’s confusion; he equated QR CODE payment systems to Universal QR CODE payment systems.

What then makes Ghana’s Universal QR Code (GhQR) unique and the first in Africa?

GhQR is first in Africa because it is Universal, which means it is a national standard that allows the participation of all financial service providers including banks, mobile money operators Fintechs and Card schemes.

With a single QR code, a merchant can receive payments from customers belonging to all these financial service providers; this is unique to Ghana and first in Africa.

Merchants no longer need to have a clutter of QR codes from different providers to receive payments from their various customers.

-Taking cues from other countries and leveraging on its existing real-time payment solution, Ghana's QR Code solution provides a standardized specification for interoperable payments across the country.

- The solution provides a centralized switching service for QR code payments by all participants within the financial services sector (Financial Institutions, Mobile Money Operators, Fintechs, International card schemes).

- Ghana’s QR Code solution is said to be Universal because, unlike the existing QR code solutions on the Ghanaian market and in some Africa countries, GhQR allows merchants to receive payments from different customer funding sources (bank account, Mobile & Fintech wallets, Cards) across different financial service providers.

- GhQR also allows merchants to receive payments instantly for all transactions at their Merchant locations irrespective of where a customer is paying a merchant from.

- The GhQR also allows for feature phone users to make payments to merchants by dialling a USSD of any financial service provider i.e. banks, mobile money companies or Fintech apps.

QR codes are a promising trend for the future of payments and are an exciting, easy and convenient way to receive and make digital payments. However, for a country to fully reap the benefits of this payment solution, standardization and interoperability are a necessity.

That is what Ghana has done. Therefore, it is undisputed that Ghana is the first country in Africa to launch a universal QR payment service and as such Dr Bawumia is 100% right on this. I hope this clarifies Dr Kobby Mensah’s confusion.