Somalia Introduces QR Code Standard in Efforts to Increase Financial Interoperab...

Tuma, a fintech startup operating in the Democratic Republic of Congo (DRC), recently secured an impressive funding round of $500,000.

This investment marks the largest funding round ever achieved by a Congolese fintech company, reports indicate.

Visa, Visible Hands, and the Social Justice Fund were among the participants in the funding round. According to the two-year-old startup, the funding will enable them to extend their operations into additional markets and enhance their product offerings.

Tuma was established by Elijah Lubala and Mpilo Makae with the aim of promoting financial inclusion in Congo. The startup offers a digital solution that enables merchants to accept card payments using their mobile phones.

With nearly half of the country’s population owning a mobile phone, Tuma utilizes software Point-of-Sale (POS) technology to convert any phone into a POS device. This innovative approach enables customers to make payments by simply tapping their cards on the back of the phone, offering a convenient and accessible solution for transactions.

To facilitate its services, Tuma has established partnerships with various financial institutions including:

• UBA Bank Group
• Credit Bank Kenya
• InTouch
• Appiawave
• Cellulant, and
• Seerbit

Tuma’s recent funding coincides with the introduction of a startup act by the government of the Democratic Republic of Congo (DRC) in 2022. The Startup Bill, which was signed into law in September 2022 by President Felix Tshisekedi, aims to encourage investment and provide support to tech innovators and entrepreneurs who are driving the country’s digital transformation.

According to Partech, the Congolese startup ecosystem raised $38 million in funding in 2022, with the majority of the amount (98%) going to the crypto firm, Jambo. The Web3 startup raised $7.5 million in seed funding in February 2022 to bolster its ongoing project in building ‘the largest, most influential Web3 community across Africa.’

In May 2022, Jambo closed a $30 million Series A funding round led by Paradigm, marking the crypto native investing giant’s first investment in Africa.

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Somalia has recently introduced a Quick Response (QR) Code Standard as part of its efforts to offer secure payment services through banking and e-commerce applications.

According to the Governor of the Central Bank of Somalia (CBS), Abdirahman Mohamed Abdullahi, the newly introduced standard, known as SOMQR Code, will provide a unified system of parameters for secure payment transactions. These standards will enable both merchants and shoppers to conveniently make or receive payments while ensuring the security of users’ funds.

“SOMQR Code Standard will revolutionize the payment landscape in Somalia as a low-cost, scalable, secure, and interoperable solution towards a cashless society,” said the CBS Governor in Mogadishu at a ceremony that was attended by 13 private banks.

Somalia will be joining its counterparts on the African continent, such as Kenya and South Africa, by launching a standardized QR code system. Kenya’s standard was launched in May 2023 with the aim of ensuring that QR codes issued by Payment Service Providers and banks conform to a uniform format and are interoperable with other institutions and mobile money networks.

Mr. Abdullahi emphasized the importance of Somalia’s continued modernization and digitalization of its national payment systems. He highlighted the principles of interoperability, financial inclusion, and efficiency as key factors in building a digital economy and recovering from the years of conflict and instability.

The Central Bank of Somalia has expressed its intention to establish ambitious interconnections among all financial service providers. This objective aims to enhance the security and reliability of payment platforms while ensuring consistency in tariffs across the board.

“The close cooperation between the Central Bank of Somalia and 13 commercial banks under the Somali Bankers Association (SBA) set up a strategic payments company named Somali Payments Switch (SPS),” said Mr Ahmed Shirwa, the chairman of SBA.

The Central Bank of Somalia is working on a national digital payments platform to promote interoperability among banking services, e-commerce platforms, and mobile money payment systems.

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