Electronic transfers

Speech by Mr. Harvesh Seegolam, Governor, Bank of Mauritius at the launch of the MauCAS QR Code

Directors of the Board of the Bank of Mauritius

First Deputy Governor

Second Deputy Governor

The general manager of the MBA

CEOs of banks and financial institutions

President of the Association of General Retailers

Members of the press

Distinguished guests

Ladies and gentlemen

Dear online viewers

A very good afternoon.

It is a pleasure to be with you today for the introduction of a new payment method on the Bank’s MauCAS platform, the MauCAS national QR code, which was announced in the National Budget in June 2021.

Ladies and gentlemen, the connection between payment systems and the central bank dates back more than two centuries. The role of central banks in payment systems has evolved from traditional banknote issuance to one of continuously shaping the payment ecosystem. Central banks have also become the main facilitators of the adaptive capacities of organizations within the financial system. Today, this transformation is mainly driven by the huge increase in the volume of payments, consumer demand for fast, efficient and inexpensive payments and technological developments.

At the same time, the payment space, which was mainly occupied by banks, has been reconfigured with the emergence of non-bank payment service providers. It is in light of this radical transformation of the payments landscape that the role of central banks has evolved. Central banks don’t just regulate payment service providers. They are the facilitators, operators and supervisors of payment systems.

Mauritius’ payments ecosystem has kept pace with international developments. Our distinguished audience here, made up of banks, non-bank payment operators, public agencies and retailers, reflects the growing synergy between the public and private sectors in the payment arena.

Ladies and gentlemen,

The trend from a cash-dominated economy to a digital economy is international. As a result, the Bank laid the groundwork for modernizing payment systems more than two decades ago.

Today’s event is a new step in the modernization and democratization of our payment ecosystem. This comes at an opportune time of accelerating demand for digital payments amid the challenges of the COVID-19 pandemic.

Few could predict that the quick response code, or the QR code as it is commonly known, could have such extensive uses in so many different fields. The QR code, which was developed in 1994 by the Japanese company Denso Wave to track auto parts during the assembly process, has today become an important instrument in payments and a low-cost catalyst for the digitization of payments.

Ladies and gentlemen,

The MauCAS QR code is being rolled out as a national QR code. This will revolutionize the payments landscape in Mauritius. As a low cost, scalable, secure and interoperable solution, the MauCAS QR code is expected to accelerate the transition to a less monetary society in Mauritius. I am sure our payments arena will benefit greatly from this new standard. This testifies to the sustained efforts of the Bank to modernize the payments landscape in Mauritius.

But, first of all, let me go back to some of the important decisions of the Bank that have contributed to the modernization of our payments landscape and led to the integration of the QR Code on the MauCAS platform. In 2000, the Bank implemented a real-time gross payment and settlement system, the Mauritius Automated Clearing and Settlement System. Commonly known as MACSS, it is at the heart of interbank fund transfers in Mauritius.

MACSS was later upgraded to support multi-currency transactions. At that time, it was the first of its kind in sub-Saharan Africa. The upgrade was completed with the automation of the Port Louis clearing house and subsequent clearing of electronic check images.

Ladies and gentlemen,

The Bank has not only focused on technological developments. Recognizing the need for a regulatory framework conducive to the development of digital payments, comprehensive legislation, the National Payment Systems Act was enacted to provide fair and equitable access to the payment system infrastructure for new players such as than Fintechs and Techfins.

However, despite all these initiatives, cash remained the predominant form of payment. This is why the Bank has recently taken a big step in the transformation of retail payments in Mauritius with the launch of the Mauritius Central Automated Switch (MauCAS). A 24/7 digital payment platform, MauCAS makes banking, e-commerce and mobile payment interoperable and encourages cashless means of payment.

One of the two components of the MauCAS platform is the Instant Payment System (IPS). As the name suggests, the IPS allows payments in near real time. In its second year of operation, the IPS recorded an eight-fold increase in the value of payments to Rs 1.2 billion, indicating strong market demand for this type of payment mechanism.

I must emphasize here that since I joined the Bank, the modernization of our payments landscape has remained very high on our agenda. We made sure that all banks offering retail payments were fully integrated with IPS in August 2020.

As part of our continued progress to improve our payments landscape, we are also embarking on a process of improving the value proposition of the card payment system.

Ladies and gentlemen,

Cell phones have become an integral part of our life. The increase in mobile density in the country is a clear indication of this trend and it is undoubtedly that many developments in the payment space are taking place using this channel. QR code-based systems rely on the consumer using their mobile to make payments. Payment via QR codes offers the customer the convenience of being in control of the payment and offers a higher level of security. Additionally, since QR codes are lightweight, they are inexpensive and easy to deploy. It is therefore a logical step forward on the path of technological evolution that QR codes are adopted on such a large scale and change the way we pay.

QR Codes are not unknown to Mauritians. They were originally introduced in non-payment areas. They were then adopted in the area of ​​payments by a banking operator and a non-banking operator. However, the QR Codes of these two institutions were based on a proprietary model and therefore operated in a closed loop.

Ladies and gentlemen,

The Bank’s goal is to develop an interoperable, financially inclusive retail payment ecosystem that will provide fast, convenient, anytime, anywhere, easy-to-use, simple, secure, fast and cost-effective payment services for merchant payments, peer-to-peer transfers and interbank transactions. With the increasing use of real-time instant payment systems and the potential benefits of QR codes, we saw fit to standardize the QR code to bring interoperability.

This is what motivated the creation of a national QR Code based on the international EMVCo standards. Branded as the MauCAS QR code, powered by the Bank of Mauritius, this QR code was designed to be fully interoperable and allow the public to make payments at any merchant location.

In addition, the national QR code will facilitate interbank transfers by avoiding the need for users to enter the account number of beneficiaries. This national QR code will also be a catalyst for the digitization of government payment services.

I am very happy that two commercial banks, namely Bank One and Absa, have already adapted their system to be interoperable. I would like to congratulate the teams, both at the level of the Bank of Mauritius and that of the commercial banks, who worked tirelessly on this project to bring the MauCAS QR Code to fruition.

The MauCAS QR code is a golden opportunity for the banking and financial sector to promote the acceptance of interoperable digital payments in the country. The Bank’s stakeholders can be assured that we will continue to work closely with them to support and implement new innovations similar to the MauCAS QR Code. The Bank remains committed to its key political objective of providing Mauritians with a choice of efficient, secure and low-cost payment methods.

Ladies and gentlemen

Our role in the field of payments is not limited to the domestic market alone.

I am pleased to inform you that the Bank and the National Payments Corporation of India (NPCI) have embarked on a project to connect the payment switch in India to MauCAS in order to promote the use of digital payment channels. The project, which is MauCAS’s first engagement with a foreign payment system, will rely on various payment methods, including cards and QR codes, to bring interoperability in the payment space between the two countries. An agreement is being finalized between the two institutions for this purpose. Technical teams have been set up by the NPCI and the Bank for the implementation and launch of the system by next year.

The Bank will continue its commitment to digitize payment systems with the collaboration of its partners, banks and other operators in the payments field. The Bank has also established an industry-wide Fintech committee to support this business.

In the coming months, we will roll out a number of key initiatives that will further strengthen MAuriitus as a leading site in payments, innovation and digitization.

With these words, I thank you all for your attention and invite you to make the most of our new MauCAS QR Code.

Thank you.

Governor Harvesh Seegolam

Port Louis,

Mauritius

Disclaimer

Bank of Mauritius published this content on September 20, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on September 20, 2021 01:11:04 PM UTC.

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