Interoperable P2M Payments Using QR Code & Its Standard in Ethiopia

In a significant step toward modernizing Ethiopia’s digital payment ecosystem, the National Bank of Ethiopia (NBE) has announced a mandatory QR code standard for all payment service providers, effective December 1, 2024. This new initiative is expected to unify the previously diverse landscape of QR payment codes, enhancing interoperability, security, and user experience across the nation.

Transforming Ethiopia’s Digital Payment Landscape

The new standard is a part of the National Digital Payment Strategy (2021-2024), an ambitious framework established by the NBE to accelerate digital payment adoption in Ethiopia. The strategy has already driven impressive growth, contributing to a fast-evolving payment ecosystem that aligns with the country’s broader economic goals.

The National Bank’s announcement highlights the primary objectives of the unified QR code standard:

• Interoperability: All payment service providers in Ethiopia will adhere to a single, standardized QR code format, ensuring seamless compatibility across different payment platforms and banks.

• Enhanced Security: Standardization strengthens security protocols, providing a safer transaction environment for consumers and merchants alike.

• Improved User Experience: The interoperable QR code will make it easier for users and merchants to conduct digital payments without the confusion of multiple, incompatible QR formats.

• Merchant Payment Transformation: By promoting digital merchant payments, the initiative is anticipated to support small businesses, increase transaction efficiency, and contribute to economic growth.

The Role of EthSwitch in Enabling QR Code Interoperability

The implementation of this standard will be supported by EthSwitch, Ethiopia’s National Switch, which will operate the infrastructure necessary to facilitate QR code interoperability. With EthSwitch’s capabilities and the supervision of the NBE, Ethiopia is set to develop a cohesive digital payment ecosystem that benefits all stakeholders—from banks to individual users.

What This Means for Payment Service Providers

Starting December 1, 2024, all payment service providers in Ethiopia must ensure that their QR codes meet the standards set by the NBE. This measure will simplify the payment process for users and merchants, streamlining digital payment experiences across different platforms. By standardizing QR code formats, Ethiopia joins a growing list of nations embracing interoperable QR standards to modernize their economies and improve financial inclusion.

Looking Forward: A Boost for Economic Growth

Ethiopia’s move to a unified QR code standard represents a forward-thinking approach to economic development. With a streamlined, interoperable payment system, the country is better positioned to support cashless transactions, particularly benefiting merchants and small businesses. By fostering a more efficient and secure payment system, the NBE’s initiative is poised to drive economic growth and pave the way for a more digitally inclusive Ethiopia.

For more information and access to the full Standard for Interoperable QR Code Payments, visit NBE’s website.