The Bangko Sentral Pursues Adoption of a National QR Code Standard for Payments

In line with its thrust of ensuring the efficiency of payment systems in support of inclusive economic development, the Monetary Board has approved a policy requiring the adoption of a National Quick Response (QR) Code Standard for payments. This Standard is necessary for ensuring interoperability of QR-enabled payment and financial services.

The QR technology has emerged as the most convenient and cost efficient means of moving funds from one account to another. Hence, the use of interoperable QR Codes has been gaining traction as an alternative to the traditional debit and credit cards. A QR code contains most if not all of the critical information such as account name and account number which are required to be specified in a payment instruction. As such, the use of this code minimizes encoding errors. Moreover, it is faster and easier to just scan the code than to dip or swipe a card, and sign a charge slip.

The adoption of a QR Code Standard on a national scale is expected to bring more Filipinos as well as micro and small enterprises onboard the financial system. The merchants simply need to print out the code on a piece of paper and display the code for their clients to scan using a smartphone. This operational requirement entails much lower cost than investing in electronic data capture equipment like point-of-sale terminals which are usually needed for card-based payment transactions.

The newly-approved policy prescribing a National QR Code Standard provides that the country's Payment System Management Body, that is, the Philippine Payments Management, Inc. (PPMI), determine the National QR Code Standard in coordination with key stakeholders particularly the payment service providers (PSPs), both banks and non-banks. To ensure that the country's QR-enabled payment and financial services are interoperable not only on domestic but also on a wider regional or global scope, the policy requires that the National QR Code Standard be aligned with the international standard.

In addition, the policy provides that the PSPs shall give utmost priority to the safety of the payers and the payees to build public trust in the QR technology. This means that the PSPs shall have the necessary measures to manage the threats and vulnerabilities associated with this technology. Moreover, the PSPs are required to establish an appropriate pricing mechanism for QR-enabled payment and financial services to encourage their clients to use these services.

For a smooth implementation of the Standard, the policy sets out a period within which the PPMI shall inform the Bangko Sentral of the Standard approved by the PPMI Board. The PSPs shall adopt the Standard within thirty (30) calendar days from the date of said notification. Nevertheless, considering that a number of PSPs have been offering QR-enabled payment services, the policy allows these PSPs to fully comply with the Standard up to 30 June 2020.

The adoption of the National QR Code Standard is another collaborative initiative between the Bangko Sentral and the PPMI under the National Retail Payment System (NRPS) regulatory framework. With this initiative, the Bangko Sentral is optimistic that all Filipinos including those at the bottom of the social pyramid can enjoy the benefits of a safe, efficient, and inclusive retail payment system.

Source: Bangko Sentral ng Pilipinas (BSP)