Mogadishu (Caasimada Online) – In a significant step towards economic modernization, Somalia has inaugurated a Quick Response (QR) Code Standard to streamline secure payments across banking and e-commerce platforms.

The Central Bank of Somalia (CBS) unveiled the SOMQR Code Standard on Tuesday, a groundbreaking development aimed at enhancing security for users’ money.

This innovative system will allow merchants and consumers to make or receive transactions under a unified framework.

The initiative positions Somalia alongside African nations such as Kenya and South Africa, which have already embraced such standardization.

Abdirahman Mohamed Abdullahi, Governor of CBS, emphasized the transformative potential of the SOMQR Code Standard.

“This will revolutionize the payment landscape in Somalia as a low-cost, scalable, secure, and interoperable solution towards a cashless society,” he asserted before an audience in Mogadishu.

Collaboration between CBS and commercial entities

Governor Abdullahi also discussed the pressing need for Somalia to continue modernizing and digitizing its national payment systems on the principles of interoperability, financial inclusion, and efficiency, thus transitioning into a digital economy.

This move serves as a part of the broader rebuilding process following years of conflict.

A key component of this advancement is the strategic collaboration between the CBS and thirteen licensed private banks.

Under the auspices of the Somali Bankers Association (SBA), these entities established the Somali Payments Switch (SPS), a strategic payments company.

Ahmed Shirwa, chairman of the SBA, underlined the importance of this partnership.

“The close cooperation between the Central Bank of Somalia and 13 commercial banks has been instrumental in setting up the SPS,” he stated.

The road to reinventing the national currency

While the digitization drive is impressive, CBS will have to address the challenge of reintroducing its convertible shilling currency.

Long marred by counterfeiting, the Somali shilling lost its credibility amidst conflict and international humanitarian intervention.

Its current exchange rate is nearly unpredictable and is widely unrecognized due to difficulties distinguishing genuine notes from forgeries.

The Somali Parliament is expected to consider a policy paper soon. If approved, it will shape how the country re-establishes its currency.

The launch of the SOMQR Code Standard marks a pivotal moment for Somalia.

CBS seeks to foster ambitious interconnections among all financial service providers in this predominantly dollarized economy where mobile payments calculate prices in dollars.

The objective is to enhance payment platform security and reliability and maintain tariff consistency.

This move closely follows similar developments in the region.

Last month, the Central Bank of Kenya rolled out the Kenya Quick Response Code Standard 2023, following South Africa’s earlier introduction.

As Somalia embarks on this digital journey, it represents a stride toward financial innovation and a step closer to a future of economic stability.