Deadline set for banks’ QR code compliance

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has given banks and financial institutions until end-June next year to fully adopt a national quick response (QR) code standard.

The central bank has approved a policy requiring the adoption of a national QR code standard for payments as part of the government’s thrust of ensuring the efficiency of payment systems in support of inclusive economic development.

The regulator said payment service providers, both banks and non-banks, should ensure interoperability of QR-enabled payment and financial services by June 30 next year.

The QR technology has emerged as the most convenient and cost efficient means of moving funds from one account to another. A QR code contains most if not all of the critical information such as account name and account number that are required to be specified in a payment instruction.

Hence, the use of interoperable QR codes has been gaining traction as an alternative to the traditional debit and credit cards. 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 that are usually needed for card-based payment transactions.

The Philippine Payments Management Inc. (PPMI) is tasked to determine the national QR code standard in coordination with key stakeholders particularly the payment service providers.

“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,” the BSP said.

In addition, payment service providers are required to 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 payment service providers are required to establish an appropriate pricing mechanism for QR-enabled payment and financial services to encourage their clients to use these services,” the regulator said.

For a smooth implementation, PMPI should inform the BSP of the approved national QR code standard to be adopted by payment service providers within 30 days.

The adoption of a national standard is another collaborative initiative between the BSP and the PPMI under the National Retail Payment System regulatory framework launched in December 2015 to raise the level of cashless transactions to about 20 percent by 2020 from the previous level of one percent.