Wednesday June 21, 2023
Mogadishu (HOL) - The Central Bank of Somalia launched the Somali National Quick Response (QR) Code Standard in Mogadishu on Tuesday, aiming to modernize and digitalize the national payment systems in the conflict-ridden Horn of Africa nation.
The launching event was attended by Deputy Minister of Finance Abdiqafar Hange, chair of the Somali Chamber of Commerce Mahamud Gabeire, the chairman of the Parliament's Finance Committee, the chairman of the Somali Bankers Association Ahmed Shirwac, CEOs of private banks, and other participants.
Somalia follows in the footsteps of Kenya, which launched a QR Code standard in May 2023.
During the event, Deputy Minister of Finance Abdiqafar Hange emphasized the significant advantages of the SOMQR code. He highlighted its role in facilitating efficient revenue collection while emphasizing its safety and cost-reducing benefits. He also mentioned the government's efforts to introduce a national ID, ensuring that both policies and equipment are prepared for implementation in the country.
Minister Abdiqafar Hange stressed the importance of accountability from the private sector to the government when implementing essential policies, emphasizing the need for a collaborative approach between the government and private sectors. He added that the process would contribute to transparency, accountability, integrity, the fight against corruption, and establishing trust with international partners.
Mahamud Gabeire, Chair of the Somali Chamber of Commerce, highlighted the benefits of SOMQR, emphasizing its positive impact on tax collection and anti-corruption measures. He regarded the implementation of SOMQR as a pivotal milestone toward digitalization and economic advancement.
Chairman of the Parliament's Finance Committee, Mohamed Farah, emphasized the need for its expansion to all regions of the country.
Chairman of the Somali Bankers Association, Ahmed Shirwac, acknowledged the collaborative efforts of the central bank and private banks in launching SOMQR. He urged the parliament and cabinet ministers to expedite the issuance of a crucial National ID.
Deputy Governor of CBS, Ali Yassin Sheikh, stated that SOMQR would facilitate efficient payment systems in Somalia, improving the country's financial system. The central and private banks are working together to develop payment technologies to propel the country to the next level.
Central Bank of Somalia Governor Abdirahman Mohamed highlighted the many benefits of the QR Code, including affordability and ease of deployment for customers, sellers, buyers, and government entities involved in revenue collection, such as taxes and fees. The SOMQR will play a key transformative role in digitizing retail payments for both private and government services in Somalia, setting a platform for financial inclusion, efficiency, and interoperability.
"We have a vibrant and large payment system in Somalia… [but] this has not been connected to banks," Mr Abdullahi explained.
However, the growing use of the internet and the number of smartphone
users facilitated the adoption of QR-based payment. The "fear of
proximity" drives the need for a low-cost contract-less payment mode,
and QR codes are the suited to address this challenge.
In 2021, the CBS launched a national payments system to drive interoperability among the 13 lenders in the country. In March 2023, the CBS also announced the adoption of International Bank Account Numbers (IBAN) by all banks in the country, reducing operational risks for banks.
Contactless payments can be made via a QR code, which means all one needs is access to the internet for secure payment services via banking and other apps.
At the close of the event, Central Bank of Somalia Governor Abdirahman Mohamed Abdullahi distributed operational guidelines to the chairman of the Somali Bankers Association (SBA) and CEOs of private banks, ensuring clarity and guidance for the successful implementation of SOMQR.