NQR Code: Seamlessly Driving Mobile Payments, Stimulating SMEs Transactions 

Clement Nwoji

Nigeria’s e-payment space has been witnessing tremendous leaps currently; courtesy of the relentless initiatives of the Central Bank of Nigeria (CBN) to widen e-payment options. These efforts, by the CBN, are being complemented by Nigerian banks, which have, consistently, been upgrading their IT infrastructure to align with the pace at which the CBN has been pushing mobile payments adoption.

 One of the Payments and Collections platforms which is recording impressive growth since its introduction is the Nigeria Quick Response (NQR) Code. It is “a secure QR-code-based payments and collections platform designed for merchants and customers to receive and make payments for goods and services”

Launched over two years ago in March 16, 2021, the Nigeria Quick Response (NQR) Code has proved to be a seamless tool for deepening financial inclusion as well as a  means of effecting digital payment transactions. Its relevance is even more appreciated in its ability to fast-track money transfers or payments between customers/individuals and merchants, merchants and merchants, and even between individuals and individuals. 

To make payments when already onboard the NQR Code payment solution platform, four simple steps are involved. For instance, after collection/selection of items to be purchased or paid for either in a supermarket or even in an informal market, all one needed to do is to sign into one’s mobile banking App on one’s smartphone. The next step is to click on “Payments” and select “QR Payment” and, then proceed to scan the QR Code provided by the merchant/seller. The final stage involves confirming the beneficiary’s name, amount and typing in one’s or payer’s/buyer’s PIN, and instantaneously the merchant/seller receives payment. At this stage, the transaction between the parties is seamlessly settled. 

On the other hand, merchants or sellers also stand to benefit from the use of the NQR Code payment solution. All that are involved include three stages. First, to enroll as a merchant, one needs to speak to one’s bank or on the alternative, download the “NQR Merchant App” from the App Store on one’s smartphone. Then, proceed to generate and present a unique NQR Code to customers to receive instant payments. With this, all that the merchant or seller has to do each time he or she wants to receive payment is just to flash the unique NQR Code to the buyer who then scans the Code to effect payment. This process is simply referred to as scan-to-pay. 

As a secure platform, under the security control of the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System Plc (NIBSS), its operation is fast and instantaneous. Provided on behalf of the financial Services industry, the CBN asserts that the NQR code payments solution offers a robust platform that “delivers instant value for person-to-business (P2B) and person-to-person (P2P) transactions by simply scanning to pay.”

To guarantee its security, the CBN continues to innovate and monitor NQR-Code operations. In its circular to Banks, Other Financial Institutions and Payments Services Providers dated July 4, 2022 on the subject; “Review of the Industry Quick Response (QR) Code Presentment Options”,  Musa I. Jimoh, the CBN’s Director, Payments Systems Management Department stated: “Following consultation with various stakeholders on ways to enhance the flexibility offered by the use of QR Codes in payments, the CBN hereby reviews section 3.4 of the framework and henceforth directs that implementation of QR Code for payments in Nigeria shall be based on either merchant-presented or consumer presented modes”.

Perhaps, the increasing patronage of NQR Code payment solutions contributed to the high rate of electronic payment transactions recorded at the end of the year, 2022. In “CBN UPDATE: Monetary Policy Committee Decision” edition of January 2023, a renowned Economist, Professor Ken Ife, the Economic Strategist with ECOWAS Commission, observed that with the embrace of electronic channels of transactions by Nigerians, and unrelenting push for cashless policy by the CBN, electronic transactions doubled in 2022 as it went to 3.5 billion transactions, equivalent to $200 billion turnover.

Among other benefits of the NQR- Code are that it offers both merchants and payers  instant value for all transactions; Zero cost of on-boarding,  requires little or no infrastructure,  instant notifications to both merchants and payers of payment made, lower transaction fees across the various price bands, little to no charge-back or dispute issues- as transactions are first authorized at the payer’s bank before being pushed to the merchant’s bank (push transactions) and provides reconciliation and reporting portal for merchants. 

As one of the paperless or electronic instruments which are essentially technology-driven platforms such as Automated Teller Machines (ATM), Automated Clearing House (ACHs), Point-Of-Sale terminals (PoS), internet payments, mobile telephones, and wire transfers, the NQR Code payment system is very convenient and safe in stimulating payment transactions for Small and Medium Enterprises (SMEs).

Being one of the Mobile Payments solutions, it involves the use of the mobile phone for the settlement of financial transactions and it supports person-to-person transfers with immediate availability of funds to the beneficiary. The CBN explains that the mobile payments use the card infrastructure for funds transfer as well as secure SMS messaging for confirmation of receipts (to beneficiaries) and payments (to account holders who have given payment instructions).

It is mainly used for low-value transactions where speed of delivery is of the essence. The services covered under this product, include account balance inquiries, funds transfer, mobile phone top-up, changing passwords, and payment of bills. 

Of particular interest is the fact that NQR usage is simplified by mere code scanning by the users as parties involved in transactions are already on board the payment solution platform. It is ideal for making transfers, settling shopping transactions, getting paid as well as effecting good times and services expenditures. Others include: making and receiving payments in convenience stores, Supermarkets, Shopping malls, Pharmacy, hair salons, restaurants, cinema shows; Taxi Payments, Bus Fares, Tolling Booths payments, Smart Retail Payments, Vending Machines, e-commerce sites, Online (Instagram) businesses, among others. 

 The NQR Code payment solution is reputed for boosting the nation’s financial system in various ways including as a fast and efficient contact-less mode of e-payments, which is convenient and safe to both the payers and the Merchants/Business Owners. It also promotes micro-payments and drives financial inclusion and cashless society; serving as an easy and cost- effective means of transacting micro-payments for Micro, Small and Medium Enterprises (MSMEs).  Above all, the ease of on-boarding NQR Code payment platform makes it a preferred choice of payment in that it does not incur any cost of set-up and entry barriers for merchants/business owners just as there is no need for investments in hardware or software infrastructure before usage. 

The statistics recorded in 2022 are likely to increase by the end of 2023 as most merchants and individuals are now even more aware and appreciative of the merits of the NQR Code payments solution. 

-Clement Nwoji is an economic and financial system analyst based in Abuja